Open AccessKnockin’ on heaven’s door? Reframing the debate on temporary employment and wages: evidence from Europe
Author(s) -
Daniela Bellani,
Giulio Bosio
Publication year - 2019
Publication title -
socio-economic review
Language(s) - English
Resource type - Journals
eISSN - 1475-147X
pISSN - 1475-1461
DOI - 10.1093/ser/mwz042
Subject(s) - employment protection legislation , endogeneity , cognitive reframing , economics , labour economics , work (physics) , legislation , demographic economics , political science , economic growth , econometrics , mechanical engineering , psychology , social psychology , law , engineering , unemployment
This article reframes the debate on the consequences of flexibilization in European labour markets focusing on the unexplored impact of temporary employment on occupational wages for permanent workers. Exploiting the variation in the temps’ density within occupation and age groups across European countries between 2003 and 2010, we find that temporary contracts negatively affect occupational average wages for insiders’ workers. These results are still robust using a dynamic system based on generalized method of moments (GMM-SYS) to account for potential endogeneity issues. We also explore the existence of heterogeneity across different occupational clusters and institutional settings. Our estimates indicate that the knock-on effect is large in countries with low employment protection legislation and it is driven by occupations characterized by untechnical work logics.