IDEAS home Printed from https://ideas.repec.org/a/spr/jlabrs/v45y2012i2d10.1007_s12651-012-0107-9.html
   My bibliography  Save this article

Fixed-term contracts and wages revisited using linked employer-employee data
[Befristete Arbeitsverträge und Entlohnung neu untersucht mit verbundenen Arbeitgeber-Arbeitnehmer-Daten]

Author

Listed:
  • Christian Pfeifer

    (Leuphana University Lüneburg)

Abstract

This empirical research note uses linked employer-employee data from the German Federal Statistical Office to estimate wage differentials between workers with fixed-term contracts and permanent contracts. The data set allows to analyze wage differentials within firms and across the wage distribution. The main findings are: (1) Worker characteristics account for about half of the unconditional mean wage differential. The wage disadvantage of workers with fixed-term contracts is further reduced by the inclusion of occupations and firm fixed effects to approximately ten percent. (2) The wage disadvantage is larger at the lower tail of the wage distribution and quite constant in the middle and upper parts of the wage distribution.

Suggested Citation

  • Christian Pfeifer, 2012. "Fixed-term contracts and wages revisited using linked employer-employee data [Befristete Arbeitsverträge und Entlohnung neu untersucht mit verbundenen Arbeitgeber-Arbeitnehmer-Daten]," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 45(2), pages 171-183, July.
    • Handle: RePEc:spr:jlabrs:v:45:y:2012:i:2:d:10.1007_s12651-012-0107-9
    DOI: 10.1007/s12651-012-0107-9
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s12651-012-0107-9
    File Function: Abstract
    Download Restriction: no
    File URL: https://libkey.io/10.1007/s12651-012-0107-9?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Alison L. Booth & Marco Francesconi & Jeff Frank, 2002. "Temporary Jobs: Stepping Stones Or Dead Ends?," Economic Journal, Royal Economic Society, vol. 112(480), pages 189-213, June.
    2. Antje Mertens & Vanessa Gash & Frances McGinnity, 2007. "The Cost of Flexibility at the Margin. Comparing the Wage Penalty for Fixed‐term Contracts in Germany and Spain using Quantile Regression," LABOUR, CEIS, vol. 21(4‐5), pages 637-666, December.
    3. Guell, Maia & Petrongolo, Barbara, 2007. "How binding are legal limits? Transitions from temporary to permanent work in Spain," Labour Economics, Elsevier, vol. 14(2), pages 153-183, April.
    4. James B. Rebitzer & Lowell J. Taylor, 1991. "A Model of Dual Labor Markets When Product Demand Is Uncertain," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(4), pages 1373-1383.
    5. Sarah Brown & John G. Sessions, 2005. "Employee Attitudes, Earnings and Fixed-Term Contracts: International Evidence," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 141(2), pages 296-317, July.
    6. Winkelmann Rainer, 2001. "Zur korrekten Interpretation der Ergebnisse einer log-linearen Regression bei Heteroskedastie. Eine methodische Untersuchung mit einer Anwendung auf die relativen Löhne von Ausländern / Correctly Inte," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 221(4), pages 418-431, August.
    7. Boockmann, Bernhard & Hagen, Tobias, 2008. "Fixed-term contracts as sorting mechanisms: Evidence from job durations in West Germany," Labour Economics, Elsevier, vol. 15(5), pages 984-1005, October.
    8. Sarah Brown & John G. Sessions, 2003. "Earnings, Education, and Fixed‐Term Contracts," Scottish Journal of Political Economy, Scottish Economic Society, vol. 50(4), pages 492-506, September.
    9. Christian Pfeifer, 2009. "Fixed‐term Contracts and Employment Adjustment: An Empirical Test of the Core–Periphery Hypothesis Using German Establishment Data," The Economic Record, The Economic Society of Australia, vol. 85(268), pages 92-107, March.
    10. Saint-Paul, Gilles, 1991. "Dynamic labor demand with dual labor markets," Economics Letters, Elsevier, vol. 36(2), pages 219-222, June.
    11. Marianthi Leontaridi, 1998. "Segmented Labour Markets: Theory and Evidence," Journal of Economic Surveys, Wiley Blackwell, vol. 12(1), pages 103-109, February.
    12. repec:bla:jecsur:v:12:y:1998:i:1:p:63-101 is not listed on IDEAS
    13. Gebel, Michael & Giesecke, Johannes, 2009. "Labour market flexibility and inequality: the changing risk patterns of temporary employment in West Germany," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 42(3), pages 234-251.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Normann Rion, 2019. "Waiting for the Prince Charming: Fixed-Term Contracts as Stopgaps," Working Papers halshs-02331887, HAL.
    2. Werner Eichhorst & Verena Tobsch, 2015. "Not so standard anymore? Employment duality in Germany [Vom Normalarbeitsverhältnis zu atypischen Verträgen? Die Dualisierung des deutschen Arbeitsmarktes]," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 48(2), pages 81-95, August.
    3. Aalia Cassim & Daniela Casale, 2018. "How large is the wage penalty in the labour broker sector?: Evidence for South Africa using administrative data," WIDER Working Paper Series wp-2018-48, World Institute for Development Economic Research (UNU-WIDER).
    4. repec:ilo:ilowps:481497 is not listed on IDEAS
    5. Daniela Casale & Aalia Cassim, 2018. "How large is the wage penalty in the labour broker sector?: Evidence for South Africa using administrative data," WIDER Working Paper Series 48, World Institute for Development Economic Research (UNU-WIDER).
    6. Marta Silva & Luis Filipe Martins & Helena Lopes, 2015. "Asymmetric labour market reforms and wage growth with fixed-term contracts: does learning about match quality matter?," Working Papers Series 2 15-04, ISCTE-IUL, Business Research Unit (BRU-IUL).
    7. Le Barbanchon, Thomas. & Malherbet, Franck., 2013. "An anatomy of the French labour market : country case studies on labour market segmentation," ILO Working Papers 994814973402676, International Labour Organization.
    8. Eichhorst, Werner & Tobsch, Verena, 2015. "Not so standard anymore? : employment duality in Germany (Vom Normalarbeitsverhältnis zu atypischen Verträgen? : die Dualisierung des deutschen Arbeitsmarktes)," Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 48(2), pages 81-95.
    9. Eichhorst, Werner & Tobsch, Verena, 2013. "Has Atypical Work Become Typical in Germany?," IZA Discussion Papers 7609, Institute of Labor Economics (IZA).
    10. Eichhorst, Werner. & Tobsch, Verena., 2013. "Has atypical work become typical in Germany? : country case studies on labour market segmentation," ILO Working Papers 994814963402676, International Labour Organization.
    11. repec:ilo:ilowps:481496 is not listed on IDEAS
    12. Sandrine Cazes & Juan Ramón de Laiglesia, 2015. "Temporary contracts and wage inequality," Chapters, in: Janine Berg (ed.), Labour Markets, Institutions and Inequality, chapter 6, pages 147-183, Edward Elgar Publishing.
    13. Christian Pfeifer, 2014. "A Note on Dual Internal Labor Markets and Wages of Temporary Workers: Evidence from Linked-Employer-Employee Data," Journal of Labor Research, Springer, vol. 35(2), pages 133-142, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Christian Pfeifer, 2014. "A Note on Dual Internal Labor Markets and Wages of Temporary Workers: Evidence from Linked-Employer-Employee Data," Journal of Labor Research, Springer, vol. 35(2), pages 133-142, June.
    2. Marta Silva & Luis Filipe Martins & Helena Lopes, 2015. "Asymmetric labour market reforms and wage growth with fixed-term contracts: does learning about match quality matter?," Working Papers Series 2 15-04, ISCTE-IUL, Business Research Unit (BRU-IUL).
    3. Albanese, Andrea & Gallo, Giovanni, 2020. "Buy flexible, pay more: The role of temporary contracts on wage inequality," Labour Economics, Elsevier, vol. 64(C).
    4. Bachmann, Ronald & Beimann, Boris & Bredtmann, Julia & David, Peggy & Ehlert, Christoph & Kassenböhmer, Sonja & Schaffner, Sandra & Siemers, Lars, 2011. "Studies on flexicurity Lot 1: Study on various aspects of labour market performance using micro data from the European Union statistics on income and living conditions (EU-SILC). Contract No. VC/2010/," RWI Projektberichte, RWI - Leibniz-Institut für Wirtschaftsforschung, number 72620.
    5. Sebastian NIELEN & Alexander SCHIERSCH, 2016. "Productivity in German manufacturing firms: Does fixed-term employment matter?," International Labour Review, International Labour Organization, vol. 155(4), pages 535-561, December.
    6. Perugini, Cristiano & Pompei, Fabrizio, 2016. "Employment protection and wage inequality within education groups in Europe," Journal of Policy Modeling, Elsevier, vol. 38(5), pages 810-836.
    7. Valeria Cirillo & Andrea Ricci, 2022. "Heterogeneity matters: temporary employment, productivity and wages in Italian firms," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 39(2), pages 567-593, July.
    8. Gail Pacheco & Bill Cochrane, 2015. "Decomposing the temporary-permanent wage gap in New Zealand," Working Papers 2015-07, Auckland University of Technology, Department of Economics.
    9. Simona COMI & Mara GRASSENI, 2009. "Are Temporary Workers Discriminated Against? Evidence from Europe," CHILD Working Papers wp17_09, CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY.
    10. Thanh-Tam Nguyen-Huu, 2021. "Do “inferior” jobs always suffer from a wage penalty? Evidence from temporary workers in Cambodia and Pakistan," Post-Print hal-04248181, HAL.
    11. Michael Gebel, 2013. "Is a Temporary Job Better than Unemployment?: A Cross-Country Comparison Based on British, German, and Swiss Panel Data," SOEPpapers on Multidisciplinary Panel Data Research 543, DIW Berlin, The German Socio-Economic Panel (SOEP).
    12. Pauline Givord & Lionel Wilner, 2015. "When Does the Stepping‐Stone Work? Fixed‐Term Contracts Versus Temporary Agency Work in Changing Economic Conditions," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 30(5), pages 787-805, August.
    13. Diego Daruich & Sabrina Di Addario & Raffaele Saggio, 2023. "The Effects of Partial Employment Protection Reforms: Evidence from Italy," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 90(6), pages 2880-2942.
    14. Bill Cochrane & Gail Pacheco & Chao Li, 2017. "Temporary-Permanent Wage Gap: Does Type of Work and Location in Distribution Matter?," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 20(2), pages 125-147.
    15. McVicar, Duncan & Wooden, Mark & Fok, Yin King, 2017. "Contingent Employment and Labour Market Pathways: Bridge or Trap?," IZA Discussion Papers 10768, Institute of Labor Economics (IZA).
    16. Garcia-Louzao, Jose & Hospido, Laura & Ruggieri, Alessandro, 2023. "Dual returns to experience," Labour Economics, Elsevier, vol. 80(C).
    17. Perugini, Cristiano & Pompei, Fabrizio, 2017. "Temporary Jobs, Institutions, and Wage Inequality within Education Groups in Central-Eastern Europe," World Development, Elsevier, vol. 92(C), pages 40-59.
    18. Inga Laß & Irma Mooi-Reci & Mark Wooden & Martin Bujard, 2024. "Temporary employment and first births: A path analysis of the underlying mechanisms using Australian and German panel data," Melbourne Institute Working Paper Series wp2024n05, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    19. Silva, António Dias da & Turrini, Alessandro, 2015. "Precarious and Less Well Paid? Wage Differences between Permanent and Fixed-term Contracts across the EU," IZA Policy Papers 105, Institute of Labor Economics (IZA).
    20. Christian Pfeifer, 2005. "Flexibility, Dual Labour Markets, and Temporary Employment. Empirical Evidence from German Establishment Data," management revue. Socio-economic Studies, Rainer Hampp Verlag, vol. 16(3), pages 404-422.

    More about this item

    Keywords

    Dual internal labor market; Fixed-term contract; Linked employer-employee data; Wage differential; Wage distribution;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:jlabrs:v:45:y:2012:i:2:d:10.1007_s12651-012-0107-9. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.