Productivity, wages and profits among Belgian firms: do fixed-term contracts matter?

Andrea Garnero, Romina Giuliano, Benoit Mahy and Francois Rycx

International Journal of Manpower, 2016, vol. 37, issue 2, 303-322

Abstract: Purpose - – The purpose of this paper is to estimate the impact of fixed-term contracts (FTCs) on labour productivity, wages (i.e. labour cost), and productivity-wage gaps (i.e. profits). Design/methodology/approach - – The authors apply dynamic panel data techniques to detailed Belgian linked employer-employee panel data covering the period 1999-2006. Findings - – Results indicate that FTCs exert stronger positive effects on productivity than on wages and (accordingly) that the use of FTCs increases firms’ profitability. Originality/value - – This paper is one of the first to examine the FTC-productivity-wage nexus while addressing three important methodological issues related to the state dependency of the three explained variables, to firm time-invariant heterogeneity, and to the endogeneity of FTCs.

Keywords: Wages; Profits; Productivity; Fixed-term contracts; Linked panel data (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eme:ijmpps:v:37:y:2016:i:2:p:303-322

DOI: 10.1108/IJM-12-2014-0263

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