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Are Temporary Workers Discriminated Against? Evidence from Europe

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  • Simona COMI

    ()

  • Mara GRASSENI

Abstract

The aim of this paper is to analyse the wage gap between temporary and permanent jobs in 12 European countries. We use the semi-parametric (quantile regression) approach and evaluate the wage gap across the entire wage distribution. We show that the fixed-term wage gap decreases as higher quantiles are considered, and that having a fixed-term contract penalizes low–skilled workers (at the bottom of the earnings distribution) more than high–skilled ones. Finally, we decompose the wage differential across the entire wage distribution in order to account for the relative importance of observed characteristics versus different returns to skills. We find that workers with the same characteristics as temporary workers would receive higher wages if they worked on permanent contracts in almost all the countries considered, and that this finding is stable across? the entire wage distribution.

Suggested Citation

  • Simona COMI & Mara GRASSENI, 2009. "Are Temporary Workers Discriminated Against? Evidence from Europe," CHILD Working Papers wp17_09, CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY.
  • Handle: RePEc:wpc:wplist:wp17_09
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    File URL: http://www.child.carloalberto.org/images/wp/child17_2009.pdf
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    References listed on IDEAS

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    1. DiNardo, John & Fortin, Nicole M & Lemieux, Thomas, 1996. "Labor Market Institutions and the Distribution of Wages, 1973-1992: A Semiparametric Approach," Econometrica, Econometric Society, vol. 64(5), pages 1001-1044, September.
    2. Matteo Picchio, 2008. "Temporary Contracts and Transitions to Stable Jobs in Italy," LABOUR, CEIS, vol. 22(s1), pages 147-174, June.
    3. James B. Rebitzer & Lowell J. Taylor, 1991. "A Model of Dual Labor Markets When Product Demand Is Uncertain," The Quarterly Journal of Economics, Oxford University Press, vol. 106(4), pages 1373-1383.
    4. Koutentakis, Franciscos, 2008. "The effect of temporary contracts on job security of permanent workers," Economics Letters, Elsevier, vol. 101(3), pages 220-222, December.
    5. Koenker, Roger W & Bassett, Gilbert, Jr, 1978. "Regression Quantiles," Econometrica, Econometric Society, vol. 46(1), pages 33-50, January.
    6. James Albrecht & Anders Bjorklund & Susan Vroman, 2003. "Is There a Glass Ceiling in Sweden?," Journal of Labor Economics, University of Chicago Press, vol. 21(1), pages 145-177, January.
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    Cited by:

    1. repec:zbw:rwirep:0295 is not listed on IDEAS
    2. Dias da Silva, António & Turrini, Alessandro, 2015. "Precarious and Less Well Paid? Wage Differences between Permanent and Fixed-term Contracts across the EU," IZA Policy Papers 105, Institute for the Study of Labor (IZA).
    3. Gail Pacheco & Bill Cochrane, 2015. "Decomposing the temporary-permanent wage gap in New Zealand," Working Papers 2015-07, Auckland University of Technology, Department of Economics.
    4. Raúl Ramos & Esteban Sanromá & Hipólito Simón, 2014. "Public-Private Sector Wage Differentials by Type of Contract: Evidence from Spain," Hacienda Pública Española, IEF, vol. 208(1), pages 107-141, March.
    5. Ferreira Sequeda M.T. & Grip A. de & Velden R.K.W. van der, 2015. "Does on-the-job informal learning in OECD countries differ by contract duration?," ROA Research Memorandum 008, Maastricht University, Research Centre for Education and the Labour Market (ROA).
    6. Paola Naddeo, 2015. "The Wage Effects Of Fixed-Term Contracts," RIEDS - Rivista Italiana di Economia, Demografia e Statistica - Italian Review of Economics, Demography and Statistics, SIEDS Societa' Italiana di Economia Demografia e Statistica, vol. 69(4), pages 63-72, October-D.
    7. Gustavo A. García, 2017. "Labor Informality: Choice or Sign of Segmentation? A Quantile Regression Approach at the Regional Level for Colombia," Review of Development Economics, Wiley Blackwell, vol. 21(4), pages 985-1017, November.
    8. Colella, Fabrizio, 2014. "Women's Part-Time - Full-Time Wage Differentials in Europe: an Endogenous Switching Model," MPRA Paper 55287, University Library of Munich, Germany.
    9. Inga Lass & Mark Wooden, 2017. "The Structure of the Wage Gap for Temporary Workers: Evidence from Australian Panel Data," Melbourne Institute Working Paper Series wp2017n08, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    10. Gabriele Ballarino & Michela Braga & Massimiliano Bratti & Daniele Checchi & Antonio Filippin & Carlo V. Fiorio & Marco Leonardi & Elena Meschi & Francesco Scervini, 2013. "GINI Country Report: Growing Inequalities and their Impacts in Italy," GINI Country Reports italy, AIAS, Amsterdam Institute for Advanced Labour Studies.
    11. Romina Giuliano & Stephan Kampelmann & Benoît Mahy & François Rycx, 2017. "Short Notice, Big Difference? The Effect of Temporary Employment on Firm Competitiveness across Sectors," British Journal of Industrial Relations, London School of Economics, vol. 55(2), pages 421-449, June.
    12. Giulio Bosio, 2014. "The Implications of Temporary Jobs on the Distribution of Wages in Italy: An Unconditional IVQTE Approach," LABOUR, CEIS, vol. 28(1), pages 64-86, March.
    13. Carmen Aina & Fernanda Mazzotta & Lavinia Parisi, 2010. "Do Flexible Employment Contracts Change Household Income Differences in Italy?," Working Papers 129, SEMEQ Department - Faculty of Economics - University of Eastern Piedmont.
    14. Perugini, Cristiano & Pompei, Fabrizio, 2016. "Employment protection and wage inequality within education groups in Europe," Journal of Policy Modeling, Elsevier, vol. 38(5), pages 810-836.
    15. Christoph Ehlert & Sandra Schaffner, 2011. "Health Effects of Temporary Jobs in Europe," Ruhr Economic Papers 0295, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    16. Berton, Fabio & Migheli Matteo, 2015. "Estimating the marginal rate of substitution between wage and employment protection," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201529, University of Turin.
    17. Ferreira Sequeda, Maria & de Grip, Andries & Van der Velden, Rolf, 2015. "Does Informal Learning at Work Differ between Temporary and Permanent Workers? Evidence from 20 OECD Countries," IZA Discussion Papers 9322, Institute for the Study of Labor (IZA).
    18. Ehlert, Christoph & Schaffner, Sandra, 2011. "Health Effects of Temporary Jobs in Europe," Ruhr Economic Papers 295, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    19. Perugini, Cristiano & Pompei, Fabrizio, 2017. "Temporary Jobs, Institutions, and Wage Inequality within Education Groups in Central-Eastern Europe," World Development, Elsevier, vol. 92(C), pages 40-59.

    More about this item

    Keywords

    Temporary jobs; fixed-term contracts; wage differentials; quantile regression; decomposition.;

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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