Productivity in German manufacturing firms: Does fixed-term employment matter?
A growing proportion of employees are working under fixed-term contracts. This paper empirically analyzes whether this strategy actually improves firm productivity. To this end, a large dataset of German manufacturing firms and various panel data models are used in order to reveal the expected non-linear effect. Thereby the analysis also takes into account distortions that may result from selection into the use of fixed-term employment. The results of the investigation show that there is no significant effect of fixed-term employment on labor productivity when controlling for the selection effect.
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