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Fixed-term Contracts as Sorting Mechanisms: Evidence From Job Durations in West Germany

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  • Boockmann, Bernhard
  • Hagen, Tobias

Abstract

We estimate the effect of initial episodes under fixed-term contracts (FTCs) on job duration in the further course of the employment spell, using data from the German Socio-Economic Panel (SOEP) from 1985 to 2002. Using a statistical matching approach, we find that job exit rates are initially much higher if the employment spell began with an FTC. However, exit rates fall below those of comparable spells spent entirely in permanent employment after a few years time. This suggests that FTCs accelerate a sorting process and that they may at least to some part be understood as prolonged probationary periods. Strikingly, the probability of long-term employment of more than five years duration is not lower in spells that are initially concluded as FTCs. Hence, the sorting processes taking place in both forms of contracts seem to be of similar intensity. --

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Bibliographic Info

Paper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number 05-85.

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Date of creation: 2005
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Handle: RePEc:zbw:zewdip:4568

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Keywords: Fixed-term employment; probationary periods; job matching; duration analysis;

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References

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Citations

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Cited by:
  1. Chadi, Adrian & Hetschko, Clemens, 2013. "Flexibilisation without hesitation? Temporary contracts and workers' satisfaction," Discussion Papers 2013/3, Free University Berlin, School of Business & Economics.
  2. Gianna Giannelli & Ursula Jaenichen & Claudia Villosio, 2012. "Have Labor Market Reforms at the Turn of the Millennium Changed the Job and Employment Durations of new Entrants?," Journal of Labor Research, Springer, vol. 33(2), pages 143-172, June.
  3. Reinowski, Eva & Sauermann, Jan, 2008. "Hat die Befristung von Arbeitsverträgen einen Einfluss auf die berufliche Weiterbildung geringqualifiziert beschäftigter Personen? (Does temporary employment affect the work-related training of low-," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 41(4), pages 489-499.
  4. Giannelli, Gianna Claudia & Jaenichen, Ursula & Villosio, Claudia, 2009. "Have Labour Market Reforms at the Turn of the Millennium Changed Job Durations of the New Entrants? A Comparative Study for Germany and Italy," IZA Discussion Papers 4591, Institute for the Study of Labor (IZA).
  5. Sebastian Nielen & Alexander Schiersch, 2012. "Productivity in German manufacturing firms: Does fixed-term employment matter?," Schumpeter Discussion Papers sdp12004, Universitätsbibliothek Wuppertal, University Library.
  6. repec:iab:iabzaf:v:41:i:2/3:p:347-364 is not listed on IDEAS
  7. Boockmann, Bernhard & Steffes, Susanne, 2007. "Seniority and Job Stability: A Quantile Regression Approach Using Matched Employer-Employee Data," ZEW Discussion Papers 07-014, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  8. José Arranz & Carlos García-Serrano & Luis Toharia, 2010. "The Influence of Temporary Employment on Unemployment Exits in a Competing Risks Framework," Journal of Labor Research, Springer, vol. 31(1), pages 67-90, March.
  9. Picchio, Matteo & Staffolani, Stefano, 2013. "Does Apprenticeship Improve Job Opportunities? A Regression Discontinuity Approach," IZA Discussion Papers 7719, Institute for the Study of Labor (IZA).
  10. Eva Reinowski & Jan Sauermann, 2008. "Hat die Befristung von Arbeitsverträgen einen Einfluss auf die Weiterbildung geringqualifiziert beschäftigter Personen?," IWH Discussion Papers 2, Halle Institute for Economic Research.
  11. Michael Beckmann & Thomas Cornelissen, 2009. "Fixed-term Employment, Work Organization and Job Satisfaction: Evidence from German Individual-Level Data," Working papers 2009/10, Faculty of Business and Economics - University of Basel.
  12. Lücke, Christine, 2013. "The effects of dismissal protection on the hazard of remaining employed," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79869, Verein für Socialpolitik / German Economic Association.
  13. Jan Sauermann, 2006. "Who Invests in Training if Contracts are Temporary? - Empirical Evidence for Germany Using Selection Correction," IWH Discussion Papers 14, Halle Institute for Economic Research.
  14. Christian Pfeifer, 2012. "Fixed-term contracts and wages revisited using linked employer-employee data," Journal of Labour Market Research, Springer, vol. 45(2), pages 171-183, July.
  15. Florent Fremigacciy & Antoine Terracol, 2009. "Subsidized temporary jobs: lock-in and stepping stone effects," Documents de recherche 09-10, Centre d'Études des Politiques Économiques (EPEE), Université d'Evry Val d'Essonne.
  16. Julien Albertini & Xavier Fairise & Florent Fremigacci, 2009. "Screening on the Job: Should Temporary Jobs Be Subsidized?," Documents de recherche 09-14, Centre d'Études des Politiques Économiques (EPEE), Université d'Evry Val d'Essonne.
  17. Takuya Hasebe, 2011. "The Type of Contract and Starting Wage and Wage Growth: The Evidence from New Graduates from Post-Secondary Schools in the Netherlands," Working Papers 20, AlmaLaurea Inter-University Consortium.
  18. Renato Faccini, 2007. "Unemployment and Within-Group Wage Inequality: Can Information Explain the Trade-Off?," Economics Working Papers ECO2007/14, European University Institute.
  19. Jochen Späth, 2013. "Non-standard Employment, Working Time Arrangements, Establishment Entry and Exit," IAW Discussion Papers 98, Institut für Angewandte Wirtschaftsforschung (IAW).

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