Fixed Term Contracts as Sorting Mechanisms: Evidence from Job Durations in West Germany

32 Pages Posted: 14 Dec 2005 Last revised: 20 Aug 2008

See all articles by Bernhard Boockmann

Bernhard Boockmann

ZEW – Leibniz Centre for European Economic Research; Institute for Applied Economic Research (IAW); IZA Institute of Labor Economics

Tobias Hagen

Frankfurt University of Applied Sciences - ReLUT - Research Lab for Urban Transport

Date Written: 2005

Abstract

We estimate the effect of initial episodes under fixed term contracts (FTCs) on job duration in the further course of the employment spell, using data from the German Socio-Economic Panel (SOEP) from 1985 to 2002. Using a statistical matching approach, we find that job exit rates are initially much higher if the employment spell began with an FTC. However, exit rates fall below those of comparable spells spent entirely in permanent employment after a few years time. This suggests that FTCs accelerate a sorting process and that they may at least to some part be understood as prolonged probationary periods. Strikingly, the probability of long-term employment of more than five years duration is not lower in spells that are initially concluded as FTCs. Hence, the sorting processes taking place in both forms of contracts seem to be of similar intensity.

Keywords: Fixed-term employment, probationary periods, job matching, duration

JEL Classification: C41, J41, J60

Suggested Citation

Boockmann, Bernhard and Hagen, Tobias, Fixed Term Contracts as Sorting Mechanisms: Evidence from Job Durations in West Germany (2005). ZEW - Centre for European Economic Research Discussion Paper No. 05-085, Available at SSRN: https://ssrn.com/abstract=869371 or http://dx.doi.org/10.2139/ssrn.869371

Bernhard Boockmann (Contact Author)

ZEW – Leibniz Centre for European Economic Research ( email )

P.O. Box 10 34 43
L 7,1 D-68161 Mannheim
Germany
+621 1235 156 (Phone)
+621 1235 225 (Fax)

Institute for Applied Economic Research (IAW) ( email )

Ob dem Himmelreich 1
Tubingen, 72074
Germany

HOME PAGE: http://www.iaw.edu

IZA Institute of Labor Economics

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

Tobias Hagen

Frankfurt University of Applied Sciences - ReLUT - Research Lab for Urban Transport

Germany

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
57
Abstract Views
798
rank
447,349
PlumX Metrics