Earnings, education, and fixed-term contracts

Reference:

Brown, S. and Sessions, J. G., 2003. Earnings, education, and fixed-term contracts. Scottish Journal of Political Economy, 50 (4), pp. 492-506.

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Abstract

We explore the relationship between earnings, education, and fixed-term contracts using data from the 1997 British Social Attitudes Survey. We find that the log hourly wage of workers employed under such contracts is approximately 13% lower than that of their 'permanent' counterparts, even after controlling for a plethora of personal and job characteristics. Standard decompositions indicate that the vast majority of this differential (more than 70%) is attributable to price effects, which may reflect discrimination on the part of the employer. Such findings may, therefore, suggest that employment protection is appropriate for individuals employed under fixed-term contracts.

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