The Price of Flexible Jobs: Wage Differentials between Permanent and Flexible Jobs in the Netherlands

Cindy Biesenbeek () and Maikel Volkerink ()
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Cindy Biesenbeek: De Nederlandsche Bank
Maikel Volkerink: De Nederlandsche Bank

De Economist, 2023, vol. 171, issue 4, No 5, 367-401

Abstract: Abstract Employees with a flexible contract, i.e., those with either a temporary contract, temporary agency workers, or those on a contract with flexible working hours, face more job and income insecurity than employees with a permanent contract. In theory, wages of flexible jobs should be higher than those of permanent jobs, to compensate for lower job security, lower expected employment outcomes and lower investment in human capital. In many countries, however, wages of flexible jobs are lower than those of permanent jobs. We examine heterogeneity within flexible jobs by estimating wage differentials for specific groups of employees. We use administrative and survey data between 2006 and 2019 for the Netherlands to estimate wage differentials between flexible and permanent employment. We find negative wage differentials for all three types of flexible employment, but most notably for men, the higher educated, temporary agency workers and employees at large firms. Our results are robust to sample selection, alternative measures of occupations, hourly wages, and contract type, and alternative estimation methods.

Keywords: Wage gap; Flexible employment; Earnings; Hourly wages; Wage differential; Non-standard work (search for similar items in EconPapers)
JEL-codes: J31 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/s10645-023-09429-9

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