Liberalization of temporary contracts has been a hallmark of labor market reforms during the last decades. More recently, factors like the sovereign debt crisis pushed the most indebted countries to unprecedented reductions of employment protection legislation (EPL) also on open-ended contracts....

In response to prolonged recession, in April 2010 the Croatian Government adopted an Economic Recovery Program to safeguard macroeconomic stability and support faster recovery of the private sector. A central element of the program is revision of labor regulations to create a more dynamic labor...

Employment protection harms early-career employees without benefitting them in later career stages (Leonardi and Pica, 2013). We demonstrate that this pattern can result from employers exploiting na¨ıve present-biased employees. Employers offer a dynamic contract with low early-career wages,...