Temporary Contracts and Employee Effort

28 Pages Posted: 11 Jun 2003

See all articles by Axel Engellandt

Axel Engellandt

University of Basel

Regina T. Riphahn

University of Erlangen-Nuremberg-Friedrich Alexander Universität Erlangen Nürnberg - Department of Economics; IZA Institute of Labor Economics; CESifo (Center for Economic Studies and Ifo Institute)

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Date Written: May 2003

Abstract

Temporary contracts provide employers with a tool to screen potential new employees and have been shown to provide "stepping stones" into permanent employment for workers. For both reasons workers on temporary contracts have an incentive to provide more effort than permanent employees. Using indicators for unpaid overtime work and absences taken from the Swiss Labor Force Survey we present evidence that temporary workers indeed provide higher effort than permanent employees: Their probability of working unpaid overtime exceeds that of permanently employed workers by 60 percent. We show the heterogeneity of this effect across different types of temporary contracts, investigate differences between men and women, and discuss the relevance of adverse selection into temporary employment.

Keywords: Temporary Work, Contract-based Incentives, Absenteeism, Overtime, Moral Hazard, Career Concerns

JEL Classification: J24, J41, M50, C25

Suggested Citation

Engellandt, Axel and Riphahn, Regina T., Temporary Contracts and Employee Effort (May 2003). Available at SSRN: https://ssrn.com/abstract=412485 or http://dx.doi.org/10.2139/ssrn.412485

Axel Engellandt

University of Basel ( email )

Petersplatz 1
Basel, CH-4003
Switzerland

Regina T. Riphahn (Contact Author)

University of Erlangen-Nuremberg-Friedrich Alexander Universität Erlangen Nürnberg - Department of Economics ( email )

Lange Gasse 20
Nuernberg, D-90403
Germany

IZA Institute of Labor Economics

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

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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