Does Fixed-Term Contract Employment Raise Firms’ Adjustment-Speed? Evidence from an Establishment Panel for West-Germany

Hagen, Tobias

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URN: urn:nbn:de:bsz:180-madoc-4590
Document Type: Working paper
Year of publication: 2001
The title of a journal, publication series: None
Publication language: English
Institution: Sonstige Einrichtungen > ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
MADOC publication series: Veröffentlichungen des ZEW (Leibniz-Zentrum für Europäische Wirtschaftsforschung) > ZEW Discussion Papers
Subject: 330 Economics
Classification: JEL: J23 J41 C23 ,
Subject headings (SWD): Westdeutschland , Pauschalpreisvertrag , Liberalismus / Wirtschaft
Abstract: Fixed-term labour contracts were liberalised in Germany in order to raise the flexibility of the labour market. However, empirical studies using industry-level data find no significant effect of FTCs on employment adjustment. This paper investigates the impact of FTC employment on firms' flexibility by estimating dynamic labour demand models with the IAB-Establishment Panel for West Germany in 1996-2000. Using a GMM estimator and comparing the estimated adjustment of total employment to the adjustment of permanent contract employment some evidence is found that FTCs raise firms' adjustment-speed.
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