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IZA Discussion Paper No. 780
May 2003
Temporary Contracts and Employee Effort
Axel Engellandt, Regina T. Riphahn

published in: Labour Economics, 2005, 12 (3), 281-299

Temporary contracts provide employers with a tool to screen potential new employees and have been shown to provide "stepping stones" into permanent employment for workers. For both reasons workers on temporary contracts have an incentive to provide more effort than permanent employees. Using indicators for unpaid overtime work and absences taken from the Swiss Labor Force Survey we present evidence that temporary workers indeed provide higher effort than permanent employees: Their probability of working unpaid overtime exceeds that of permanently employed workers by 60 percent. We show the heterogeneity of this effect across different types of temporary contracts, investigate differences between men and women, and discuss the relevance of adverse selection into temporary employment.

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The IZA@LISER Network is a global community of scholars dedicated to excellence in labor economics and related fields, now coordinated at the Luxembourg Institute of Socio-Economic Research (LISER) following its transition from Bonn.

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