Yongjian Hu (University of Amsterdam), Kea Tijdens

Fixed-term contracts in the Netherlands: who took them, how were they paid? The analysis using the linked employee-employer data

Since the 1980s the efficiency of labour market has been the major topic in the social-economic debate across EU member countries. The debates were characterized by a bias in favor of increasing flexibility in labor market. As other EU member countries, fixed-term contracts have received much attention in the Dutch labour market. In this paper, we use the linked employee-employer data, the “AVO”(Arbeids Voorwaarden Ontwikkeling) to analyze fixed-term contracts in the Netherlands. We first illustrate the major structures of fixed-term contracts and then study what type of employee is more likely to take fixed-term contract by using a multinomial logit model. We also examine the wage differentials between permanent contracts and fixed-term contracts. The results show that there was no evidence that fixed-term contracts received wage premium because of their taking precarious jobs, in contrast, there was a larger wage penalty associated with full-time workers employed under fixed-term contract, though for fixed-term part-timers, such wage differentials could be shrunk.

Keywords: fixed-term contracts, permanent contracts, hourly wage differential (gap)

JEL Codes: J23, J31

Session: 5d   2003   Category: Labour market dynamics 2

Paper