Are Flexible Contracts Bad for Workers? Evidence from Job Satisfaction Data
35 Pages Posted: 29 Nov 2007 Last revised: 17 Sep 2008
Date Written: June 3, 2008
If workers can choose between permanent and flexible contracts, compensating wage differentials should arise to equalize on-the-job utility in the two types of contracts. Estimating job satisfaction using the British Household Panel Survey shows that agency and casual contracts are associated with routinely lower satisfaction. This results because the low job satisfaction associated with less job security is not offset by higher compensation or other job characteristics. Job security is sufficiently important that holding constant this one facet of satisfaction eliminates the overall gap in job satisfaction between flexible and permanent contracts.
Keywords: Flexible Contracts, Job Satisfaction, Job Security
JEL Classification: J28, J41
Suggested Citation: Suggested Citation