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The Price of Flexible Jobs: Wage Differentials between Permanent and Flexible Jobs in the Netherlands

Author

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  • Cindy Biesenbeek

    (De Nederlandsche Bank)

  • Maikel Volkerink

    (De Nederlandsche Bank)

Abstract

Employees with a flexible contract, i.e., those with either a temporary contract, temporary agency workers, or those on a contract with flexible working hours, face more job and income insecurity than employees with a permanent contract. In theory, wages of flexible jobs should be higher than those of permanent jobs, to compensate for lower job security, lower expected employment outcomes and lower investment in human capital. In many countries, however, wages of flexible jobs are lower than those of permanent jobs. We examine heterogeneity within flexible jobs by estimating wage differentials for specific groups of employees. We use administrative and survey data between 2006 and 2019 for the Netherlands to estimate wage differentials between flexible and permanent employment. We find negative wage differentials for all three types of flexible employment, but most notably for men, the higher educated, temporary agency workers and employees at large firms. Our results are robust to sample selection, alternative measures of occupations, hourly wages, and contract type, and alternative estimation methods.

Suggested Citation

  • Cindy Biesenbeek & Maikel Volkerink, 2023. "The Price of Flexible Jobs: Wage Differentials between Permanent and Flexible Jobs in the Netherlands," De Economist, Springer, vol. 171(4), pages 367-401, December.
    • Handle: RePEc:kap:decono:v:171:y:2023:i:4:d:10.1007_s10645-023-09429-9
    DOI: 10.1007/s10645-023-09429-9
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    More about this item

    Keywords

    Wage gap; Flexible employment; Earnings; Hourly wages; Wage differential; Non-standard work;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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