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Seminar

Firm Sorting, Bargaining, and the Wage Penalty of Temporary Work Contracts

  • Location
    Erasmus University Rotterdam, E building, Kitchen/Lounge E1
    Rotterdam
  • Date and time

    May 08, 2025
    12:00 - 13:00

Abstract

Workers on temporary contracts earn lower hourly wages than comparable workers with permanent contracts, despite facing greater job insecurity. We examine how firm-contract wage policies contribute to this temporary contract wage penalty. Two-thirds of the penalty is explained by the sorting of workers into temporary contracts in lower-paying firms. The remaining one-third arises from wage gaps within firms between contract types. Consistent with monopsony power, increased labour market concentration leads firms to both rely more on temporary contracts and compress wages for temporary relative to permanent workers. Joint paper with Agnieszka Markiewicz and Ana Figueiredo.