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Earnings, Education, and Fixed‐Term Contracts

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  • Sarah Brown
  • John G. Sessions

Abstract

We explore the relationship between earnings, education, and fixed‐term contracts using data from the 1997 British Social Attitudes Survey. We find that the log hourly wage of workers employed under such contracts is approximately 13% lower than that of their ‘permanent’ counterparts, even after controlling for a plethora of personal and job characteristics. Standard decompositions indicate that the vast majority of this differential (more than 70%) is attributable to price effects, which may reflect discrimination on the part of the employer. Such findings may, therefore, suggest that employment protection is appropriate for individuals employed under fixed‐term contracts.

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  • Sarah Brown & John G. Sessions, 2003. "Earnings, Education, and Fixed‐Term Contracts," Scottish Journal of Political Economy, Scottish Economic Society, vol. 50(4), pages 492-506, September.
    • Handle: RePEc:bla:scotjp:v:50:y:2003:i:4:p:492-506
    DOI: 10.1111/1467-9485.5004007
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    Cited by:

    1. Sarah Brown & John G. Sessions, 2005. "Employee Attitudes, Earnings and Fixed-Term Contracts: International Evidence," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 141(2), pages 296-317, July.
    2. José Antonio Ariza Montes, 2008. "La estabilidad laboral en Andalucía: un análisis comparado entre hombres y mujeres mediante un modelo de regresión logística," Economic Working Papers at Centro de Estudios Andaluces E2008/06, Centro de Estudios Andaluces.
    3. Takuya Hasebe, 2011. "The Type of Contract and Starting Wage and Wage Growth: The Evidence from New Graduates from Post-Secondary Schools in the Netherlands," Working Papers 20, AlmaLaurea Inter-University Consortium.
    4. Eleonora Bartoloni & Andrea Marino & Maurizio Baussola & Davide Romaniello, 2023. "Urban Non-urban Agglomeration Divide: Is There a Gap in Productivity and Wages?," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 9(2), pages 789-827, July.
    5. Christian Pfeifer, 2012. "Fixed-term contracts and wages revisited using linked employer-employee data [Befristete Arbeitsverträge und Entlohnung neu untersucht mit verbundenen Arbeitgeber-Arbeitnehmer-Daten]," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 45(2), pages 171-183, July.
    6. Silva, António Dias da & Turrini, Alessandro, 2015. "Precarious and Less Well Paid? Wage Differences between Permanent and Fixed-term Contracts across the EU," IZA Policy Papers 105, Institute of Labor Economics (IZA).
    7. 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.
    8. W. D. McCausland & F. Summerfield & I. Theodossiou, 2020. "The Effect of Industry-Level Aggregate Demand on Earnings: Evidence from the US," Journal of Labor Research, Springer, vol. 41(1), pages 102-127, June.
    9. Nuno Crespo & Nádia Simões & José Castro Pinto, 2013. "Determinant factors of job quality in Europe," Working Papers Series 2 13-01, ISCTE-IUL, Business Research Unit (BRU-IUL).
    10. Albanese, Andrea & Gallo, Giovanni, 2020. "Buy flexible, pay more: The role of temporary contracts on wage inequality," Labour Economics, Elsevier, vol. 64(C).
    11. Mirko Draca & Colin Green, 2004. "The Incidence and Intensity of Employer Funded Training: Australian Evidence on the Impact of Flexible Work," Scottish Journal of Political Economy, Scottish Economic Society, vol. 51(5), pages 609-625, November.
    12. Christian Pfeifer, 2014. "A Note on Dual Internal Labor Markets and Wages of Temporary Workers: Evidence from Linked-Employer-Employee Data," Journal of Labor Research, Springer, vol. 35(2), pages 133-142, June.
    13. Matteo, PICCHIO, 2006. "Wage Differentials and Temporary Jobs in Italy," Discussion Papers (ECON - Département des Sciences Economiques) 2006033, Université catholique de Louvain, Département des Sciences Economiques.
    14. Fuxi Wang & Bernard Gan & Yanyuan Cheng & Lin Peng & Jiaojiao Feng & Liquian Yang & Yiheng Xi, 2019. "China’s Employment Contract Law: Does it deliver employment security?," The Economic and Labour Relations Review, , vol. 30(1), pages 99-119, March.

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