Why do firms use fixed-term contracts?

"Temporary forms of employment account for a variable but never trivial share of total employment in both the U.S. and in Europe. In this article we look at how one specific form of temporary employment - employment with fixed-term contracts - fits into employers' hiring policies. We find...

Full description

Bibliographic Details
Main Authors: Portugal, Pedro, Varejao, José
Institution:ETUI-European Trade Union Institute
Format: TEXT
Language:English
Published: Bonn 2009
IZA
Subjects:
Online Access:https://www.labourline.org/KENTIKA-19187347124919055299-Why-do-firms-use-fixed-term-co.htm
Description
Summary:"Temporary forms of employment account for a variable but never trivial share of total employment in both the U.S. and in Europe. In this article we look at how one specific form of temporary employment - employment with fixed-term contracts - fits into employers' hiring policies. We find that human capital variables (schooling, skills and employer-provided training) as measured at the levels of the worker and the workplace are important determinants of the employers' decisions to hire with fixed-term contracts and to promote temporary workers to permanent positions. Those employers that hire more with fixed-term contracts are also those that are more likely to offer a permanent position to their newly-hired temporary employees. Our results indicate that fixed-term contracts are used as mechanisms for screening workers for permanent positions."
Physical Description:29 p.
Digital