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Temporary Contracts and Employee Effort

Author

Listed:
  • Engellandt, Axel

    (University of Basel)

  • Riphahn, Regina T.

    (University of Erlangen-Nuremberg)

Abstract

Temporary contracts provide employers with a tool to screen potential new employees and have been shown to provide "stepping stones" into permanent employment for workers. For both reasons workers on temporary contracts have an incentive to provide more effort than permanent employees. Using indicators for unpaid overtime work and absences taken from the Swiss Labor Force Survey we present evidence that temporary workers indeed provide higher effort than permanent employees: Their probability of working unpaid overtime exceeds that of permanently employed workers by 60 percent. We show the heterogeneity of this effect across different types of temporary contracts, investigate differences between men and women, and discuss the relevance of adverse selection into temporary employment.

Suggested Citation

  • Engellandt, Axel & Riphahn, Regina T., 2003. "Temporary Contracts and Employee Effort," IZA Discussion Papers 780, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp780
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    More about this item

    Keywords

    temporary work; contract-based incentives; absenteeism; overtime; moral hazard; career concerns;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • M50 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - General
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities

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