Productivity, wages and profits among Belgian firms: do fixed-term contracts matter?
International Journal of Manpower
Article publication date: 3 May 2016
The purpose of this paper is to estimate the impact of fixed-term contracts (FTCs) on labour productivity, wages (i.e. labour cost), and productivity-wage gaps (i.e. profits).
The authors apply dynamic panel data techniques to detailed Belgian linked employer-employee panel data covering the period 1999-2006.
Results indicate that FTCs exert stronger positive effects on productivity than on wages and (accordingly) that the use of FTCs increases firms’ profitability.
This paper is one of the first to examine the FTC-productivity-wage nexus while addressing three important methodological issues related to the state dependency of the three explained variables, to firm time-invariant heterogeneity, and to the endogeneity of FTCs.
JEL Classification — D24, J24, J31, M12
Garnero, A., Giuliano, R., Mahy, B. and Rycx, F. (2016), "Productivity, wages and profits among Belgian firms: do fixed-term contracts matter?", International Journal of Manpower, Vol. 37 No. 2, pp. 303-322. https://doi.org/10.1108/IJM-12-2014-0263
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