Determinants of Using Fixed-term Contracts in the Egyptian Labor Market: Empirical Evidence from Manufacturing Firms Using World Bank Firm-Level Data for Egypt

Ahmed Fayez Abdelgouad (hmdfayez@yahoo.com)
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Ahmed Fayez Abdelgouad: Leuphana University Lueneburg, Germany

No 301, Working Paper Series in Economics from University of Lüneburg, Institute of Economics

Abstract: Based on dual labor market theory, fixed-term contracts (FTCs) as an important feature of labor market flexibility were analyzed to test the following hypothesis: Firms in the manufacturing sector in Egypt use FTCs to adjust the level of employment to the profit maximizing level in case of demand changes. The hypothesis was not supported by the results of econometric analyses with a firm-level data set from the World Bank Enterprise Surveys. Probit and Tobit models were used to estimate the probability and intensity of different kinds of numerical labor market flexibility (FTCs utilization, hiring and firing) in Egypt. Empirical results revealed that demand changes had no effects on using FTCs in the manufacturing firms in Egypt. In addition, the results indicated that there was no effect on using hiring and firing instruments.

Keywords: labor market flexibility; fixed-term contracts (FTCs); dual labor market (search for similar items in EconPapers)
JEL-codes: J21 J41 J42 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2014-07
New Economics Papers: this item is included in nep-ara and nep-lma
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