Job dynamics and fixed-term contracts : empirical evidence from the IAB establishment panel for Baden-Württemberg

Abstract

"This paper describes the role of fixed-term employment contracts in the job dynamics of firms in Baden-Württemberg in 2001. Although only 4.4 percent of the workers have a fixed-term contract, more than a quarter of all hirings occur on the basis of such a contract. Fixed term contracts are used by declining firms more than by expanding firms: in declining firms some 44 percent of the hirings are in the form of fixed-term employment relationships, which could probably be attributed to the uncertain business development in these firms. Of the temporary employees whose fixed-term contracts expired in 2001, approximately 51 percent changed to a permanent employment relationship in the same firm, whilst approximately 49 percent left the firm. The rate at which fixed-term employees are made permanent is clearly higher in growing firms. There in particular fixed-term employment is obviously not only used as a short-term adjustment instrument, but also in order to try out newly hired employees. Further findings of the data analysis concern the simultaneous inflow and outflow of workers into and out of the firm, which is known as rotation or churning. The churning rate stands at almost 65 percent of overall employment, i.e. almost two thirds of the turnover serves to exchange employees without it being associated with the creation or cutting of jobs. The results also show that the firms frequently offer the workers fixed-term contracts when refilling jobs, even though the jobs were previously permanent ones. If this phenomenon is compared with the number of conversions of fixed-term contracts into permanent ones, it can be seen that on balance no displacement of regular employment can be determined." (Author's abstract, IAB-Doku) ((en))

Cite article

Boockmann, B. & Hagen, T. (2002): Arbeitsplatzdynamik und befristete Verträge: Empirische Evidenz aus dem IAB-Betriebspanel für Baden-Württemberg. In: Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Vol. 35, No. 3, p. 385-396.