Why do firms use fixed-term contracts?

Pedro Portugal () and José Varejão ()
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José Varejão: Universidade do Porto and CEF.UP

Portuguese Economic Journal, 2022, vol. 21, issue 3, No 7, 421 pages

Abstract: Abstract 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, measured at the levels of the worker and the workplace, are important determinants of the employers’ decisions to hire with temporary contracts and to promote temporary workers to permanent positions. Those employers that hire more with temporary 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 a mechanism for screening workers for permanent positions.

Keywords: Fixed-term contracts; Adjustment costs; Labor demand; J23; J41 (search for similar items in EconPapers)
Date: 2022
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Related works:
Working Paper: Why Do Firms Use Fixed-Term Contracts? (2009)
Working Paper: Why Do Firms Use Fixed-Term Contracts? (2003)
Working Paper: Why do Firms Use Fixed-Term Contracts? (2003)
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DOI: 10.1007/s10258-022-00215-0

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