Flexible Labor Contracts, Firm-specific Pay, and Wages

José Gabo Carreño Bustos, Harry Huizinga, Burak Uras

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Abstract

In this paper, we use comprehensive employer-employee data for the Netherlands to investigate the labor income effects of flexible labor contracts in two different settings: wage determination as in the AKM model, and an analysis of earnings losses after job displacement. In both settings, we find that flexible contracts lead to lower wages, but that workers with flexible contracts primarily earn less because they work at or join lower paying firms. This implies that the negative effects of flexible contracts on wage income are overstated, if firm-specific pay differentials are not taken into account.
Original languageEnglish
Place of PublicationTilburg
PublisherCentER, Center for Economic Research
Number of pages22
Volume2024-010
Publication statusPublished - 9 Apr 2024

Publication series

NameCentER Discussion Paper
Volume2024-010

Keywords

  • job discplacement
  • flexible contracts
  • alternative work arrangements
  • earning losses
  • firm-specific wage premiums
  • income disparities
  • labor market

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