2007
DOI: 10.1111/j.1467-9914.2007.00396.x
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The Cost of Flexibility at the Margin. Comparing the Wage Penalty for Fixed‐term Contracts in Germany and Spain using Quantile Regression

Abstract: Germany and Spain are typically regarded as 'rigid' economies, yet both have had different experiences of fixed-term jobs. Using quantile regression we find that in West Germany the earnings of permanent and fixed-term workers are most similar among high earners and most dissimilar among low earners. In Spain, the wage penalty shows little variation across the distribution of wages. This pattern was also found for different occupational groups, although there are clear differences in the absolute wage penalty … Show more

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Cited by 65 publications
(68 citation statements)
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References 28 publications
(38 reference statements)
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“…Many recent studies report adverse labour market effects on people with fixed-term contracts, though there is also evidence that in the majority of cases these negative effects level off once employees make the transition to permanent employment (Amuedo-Dorantes 2000; Hagen 2002Hagen , 2004Hagen , 2005Hagen , 2006Booth et al 2002;Giesecke and Groß 2003;Kalleberg 2000;Mertens et al 2007). Given the disadvantages of temporary employment, it is important to understand the processes of allocating individuals to these inferior labour market positions.…”
Section: Introductionmentioning
confidence: 99%
“…Many recent studies report adverse labour market effects on people with fixed-term contracts, though there is also evidence that in the majority of cases these negative effects level off once employees make the transition to permanent employment (Amuedo-Dorantes 2000; Hagen 2002Hagen , 2004Hagen , 2005Hagen , 2006Booth et al 2002;Giesecke and Groß 2003;Kalleberg 2000;Mertens et al 2007). Given the disadvantages of temporary employment, it is important to understand the processes of allocating individuals to these inferior labour market positions.…”
Section: Introductionmentioning
confidence: 99%
“…141-144;Sessions 2003, 2005;McGinnity 2004, 2005;Mertens et al 2007). Some studies also explore the wage differentials across the wage distribution and find larger than average wage differentials at the lower tail of the wage distribution and low but still significant wage disadvantages for FTCs at the top of the wage distribution (Mertens and McGinnity 2005;Mertens et al 2007). Due to data limitations previous studies, at least for Germany, suffer from several shortcomings.…”
Section: Introductionmentioning
confidence: 99%
“…EPL imposes financial and procedural obligations on employers should they want to terminate employment contracts. In more rigid economies legal regulations as well as labour court decisions can make it both time-consuming and expensive to lay off permanent employees (see for instance Mertens et al, 2007;OECD, 2004: chapter 2). In more flexible (deregulated) economies, weaker EPL allows employers to hire and fire with fewer procedural inconveniences and at lower cost.…”
Section: Employment Protection Legislation and The Regulation Of Tempmentioning
confidence: 99%