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

Productivity, wages and profits among Belgian firms: do fixed-term contracts matter? 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. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Manpower Emerald Publishing

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

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Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
0143-7720
DOI
10.1108/IJM-12-2014-0263
Publisher site
See Article on Publisher Site

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.

Journal

International Journal of ManpowerEmerald Publishing

Published: May 3, 2016

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