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Worker representation and temporary employment in Germany: The deployment and extent of fixed-term contracts and temporary agency work

John T. Addison (Department of Economics, Darla Moore School of Business, University of South Carolina, Columbia, South Carolina, USA) (Department of Economics and Finance, Durham University Business School, Durham, UK) (IZA Institute of Labor Economics, Bonn, Germany)
Paulino Teixeira (CeBER, Faculdade de Economia, Universidade de Coimbra, Coimbra, Portugal) (IZA Institute of Labor Economics, Bonn, Germany)
Philipp Grunau (Institut für Arbeitsmarkt- und Berufsforschung, Bundesagentur für Arbeit, Nuremberg, Germany)
Lutz Bellmann (Institut für Arbeitsmarkt- und Berufsforschung, Bundesagentur für Arbeit, Nuremberg, Germany) (Universität Erlangen-Nürnberg, Erlangen, Germany) (IZA Institute of Labor Economics, Bonn, Germany)

Journal of Participation and Employee Ownership

ISSN: 2514-7641

Article publication date: 23 October 2018

Issue publication date: 20 June 2019

Abstract

Purpose

The purpose of this paper is to investigate the impact of key labor institutions on the occurrence and extent of temporary employment.

Design/methodology/approach

In a new departure, this study uses a zero-inflated negative binomial (ZINB) model given that most establishments are non-users of either fixed-term contracts (FTCs) or temporary agency workers.

Findings

This study examines the potential impact of works councils and unions on the use and intensity of use of FTCs and temporary agency work. There is a little indication that these variables are correlated with the use/non-use of either type of temporary work, especially in the case of FTCs. Collective bargaining displays different relationships with their intensity of use: a negative association for sectoral bargaining and FTCs and the converse for firm-level bargaining and agency temps. Of more interest, however, is the covariation between the number of temporary employees and the interaction between works councils and product market volatility. The intensity of use of agency temps (FTCs) is predicted to rise (fall) as volatility increases whenever a works council is present. These disparities require further investigation but most likely reflect differences in function, with agency work being more directed toward the protection of an arguably shrinking core and fixed-term contacts encountering resistance to their increased use as a buffer stock. The two types of temporary employment are seemingly non-complementary, an interpretation that receives support from the study’s further analysis of FTC flow data.

Research limitations/implications

The non-complementarity of the two types of contract is the hallmark of this paper.

Originality/value

The first study to deploy a ZINB model to examine both the occurrence and incidence of temporary work.

Keywords

Acknowledgements

The author acknowledges research support from the Riegel and Emory HR Research Fellows Program at the University of South Carolina.

Citation

Addison, J.T., Teixeira, P., Grunau, P. and Bellmann, L. (2019), "Worker representation and temporary employment in Germany: The deployment and extent of fixed-term contracts and temporary agency work", Journal of Participation and Employee Ownership, Vol. 2 No. 1, pp. 24-46. https://doi.org/10.1108/JPEO-11-2017-0003

Publisher

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Emerald Publishing Limited

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