The Use of Flexible Working Contracts in West Germany: Evidence from an Establishment Panel

35 Pages Posted: 15 May 2003

See all articles by Bernhard Boockmann

Bernhard Boockmann

ZEW – Leibniz Centre for European Economic Research; Institute for Applied Economic Research (IAW); IZA Institute of Labor Economics

Tobias Hagen

Frankfurt University of Applied Sciences; Frankfurt University of Applied Sciences - ReLUT - Research Lab for Urban Transport

Abstract

This paper investigates under which conditions firms use fixed-term contracts, subcontracted and freelance work. Using a probit model which accounts for unobserved heterogeneity, we find that positive changes in expected or actual turnover are associated with a higher probability of employing atypical work, which suggests that these forms of employment are used as means of adjustment. Other important factors are employees' skill levels, investment in information technology, and the existence of collective wage agreements and works councils. Furthermore, a natural experiment is used to evaluate the impact of dismissal protection for permanent workers on the use of flexible working contracts. There is clear evidence that reducing dismissal protection decreases the demand for fixed-term employment.

Keywords: Flexible working contracts, fixed-term employment, labour demand, adjustment costs

JEL Classification: C23, J23, J42

Suggested Citation

Boockmann, Bernhard and Hagen, Tobias, The Use of Flexible Working Contracts in West Germany: Evidence from an Establishment Panel. ZEW Discussion Paper No. 01-33. Available at SSRN: https://ssrn.com/abstract=358341 or http://dx.doi.org/10.2139/ssrn.358341

Bernhard Boockmann (Contact Author)

ZEW – Leibniz Centre for European Economic Research ( email )

P.O. Box 10 34 43
L 7,1 D-68161 Mannheim
Germany
+621 1235 156 (Phone)
+621 1235 225 (Fax)

Institute for Applied Economic Research (IAW) ( email )

Ob dem Himmelreich 1
Tubingen, 72074
Germany

HOME PAGE: http://www.iaw.edu

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Tobias Hagen

Frankfurt University of Applied Sciences ( email )

Nibelungenplatz 1
Frankfurt / Main, 60318
Germany

Frankfurt University of Applied Sciences - ReLUT - Research Lab for Urban Transport

Germany

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