Abstract: a fast-growing literature studies how sorting into particular jobs, firms, or locations affects workers. The key challenge when studying such questions is the non-random sorting of workers. We propose a novel identification strategy that exploits the timing of worker-firm matching, by interacting high-frequency information on the duration of contracts on the labor supply and transitory fluctuations in job creation on the labor demand side. We apply this method to address a central question in dual labor markets: how do different contract types – fixed-term or permanent contracts – affect workers’ careers? We find that transitory variation in the opening of permanent contracts is highly predictive of individual contract upgrade probabilities. Reaching a permanent position translates into higher employment and earnings growth in the short-run. However, the stability derived from these positions does not lead to long-lasting gains in earnings.

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