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Determinants of Using Fixed-term Contracts in the Egyptian Labor Market: Empirical Evidence from Manufacturing Firms Using World Bank Firm-Level Data for Egypt

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  • Ahmed Fayez Abdelgouad

    (Leuphana University Lueneburg, Germany)

Abstract

Based on dual labor market theory, fixed-term contracts (FTCs) as an important feature of labor market flexibility were analyzed to test the following hypothesis: Firms in the manufacturing sector in Egypt use FTCs to adjust the level of employment to the profit maximizing level in case of demand changes. The hypothesis was not supported by the results of econometric analyses with a firm-level data set from the World Bank Enterprise Surveys. Probit and Tobit models were used to estimate the probability and intensity of different kinds of numerical labor market flexibility (FTCs utilization, hiring and firing) in Egypt. Empirical results revealed that demand changes had no effects on using FTCs in the manufacturing firms in Egypt. In addition, the results indicated that there was no effect on using hiring and firing instruments.

Suggested Citation

  • Ahmed Fayez Abdelgouad, 2014. "Determinants of Using Fixed-term Contracts in the Egyptian Labor Market: Empirical Evidence from Manufacturing Firms Using World Bank Firm-Level Data for Egypt," Working Paper Series in Economics 301, University of Lüneburg, Institute of Economics.
    • Handle: RePEc:lue:wpaper:301
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    References listed on IDEAS

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    More about this item

    Keywords

    labor market flexibility; fixed-term contracts (FTCs); dual labor market;
    All these keywords.

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets

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