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The effects of fixed-term contracts on workers in Colombia

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  • Luz Karime Abadía Alvarado

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Abstract

This paper studies the effects of fixed-term contracts on workers. Specifically, the paper analyzes their impact on wages and on satisfaction levels. Regulations governing fixed-term and indefinite contracts in Colombia and the main labor reforms related to these two types of contract are analyzed. Women, young and low -educated workers, who work in small firms, in the private sector and in construction or manufacturing are most likely to have fixed-term contracts. In terms of wages, we found a significant raw and adjusted wage gap against workers with fixed-term contracts. Finally, we found, as expected, evidence that fixed-term contracts reduce the level of worker satisfaction. ***** Este artículo estudia los efectos de los contratos a término fijo en los trabajadores en cuanto a su impacto en salarios y nivel de satisfacción. Se analizan las principales reformas laborales relacionadas con contratos indefinidos y a término fijo. Mujeres, jóvenes y trabajadores con bajos niveles de educación, que trabajan en firmas pequeñas, en el sector público y en los sectores de construcción o industria manufacturera son los más propensos a tener contratos a término fijo. Se encuentra, además, una importante brecha salarial observada y ajustada en contra de trabajadores con contrato a término fijo, así como menores niveles de satisfacción para estos.

Suggested Citation

  • Luz Karime Abadía Alvarado, 2014. "The effects of fixed-term contracts on workers in Colombia," Revista Cuadernos de Economía, Universidad Nacional de Colombia -FCE - CID, August.
  • Handle: RePEc:col:000093:012111
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    File URL: http://www.fce.unal.edu.co/media/files/documentos/Cuadernos/63/v33n63a06.pdf
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    References listed on IDEAS

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    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. Cristina Barceló & Ernesto Villanueva, 2010. "The response of household wealth to the risk of losing the job: evidence from differences in firing costs," Working Papers 1002, Banco de España;Working Papers Homepage.
    4. Douglas Staiger & James H. Stock, 1997. "Instrumental Variables Regression with Weak Instruments," Econometrica, Econometric Society, vol. 65(3), pages 557-586, May.
    5. Maia Guell, 2000. "The effects of fixed-term contracts on the duration distribution of unemployment: the Spanish case," Working Papers 822, Princeton University, Department of Economics, Industrial Relations Section..
    6. Lewis M. Segal & Daniel G. Sullivan, 1997. "The Growth of Temporary Services Work," Journal of Economic Perspectives, American Economic Association, vol. 11(2), pages 117-136, Spring.
    7. Dimitris Pavlopoulos, 2013. "Starting Your Career With a Fixed-Term Job: Stepping-Stone or "Dead End"?," Review of Social Economy, Taylor & Francis Journals, vol. 71(4), pages 474-501, December.
    8. Juan F. Jimeno & Luis Toharia, 1993. "The effects of fixed-term employment on wages: theory and evidence from Spain," Investigaciones Economicas, Fundación SEPI, vol. 17(3), pages 475-494, September.
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    More about this item

    Keywords

    Types of contracts; labor contracts; fixed-term and indefinite contract; wage gap; instrumental variable.;

    JEL classification:

    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • 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

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