Wage differential between permanent and temporary contracts of full-time jobs: An empirical study of bivariate employment decisions
Journal
Academia Economic Papers
Journal Volume
46
Journal Issue
2
Pages
133-183
Date Issued
2018
Author(s)
Lu H.-C.
Chen M.
Abstract
This empirical study considers two decisions of employment: the working hours (i.e. full-time/part-time) and the pattern of contracts (i.e. permanent/fixed-term). Using Heck-man¡¦s two-stage estimation and simultaneously considering the decisions of working hours and the pattern of contracts, we analyze the wage differential between permanent and temporary contracts of the full-time employment and further explore the sources of wage differential. By gender, we employ the Oaxaca-Blinder decomposition technique and find that the wage differential for female workers is caused mostly by endowments including individual characteristics (such as experience, years of schooling and age) and job characteristics (such as firm size or occupation). However, that for male workers mostly results from the discrimination that comes with the unorthodox nature of temporary contracts. That is, male workers are subject to more discrimination than female workers under temporary contracts. Finally we find that years of schooling and work experience are the major factors that contribute to the wage differential between permanent and temporary contracts. ? 2018, Academia Sinica. All rights reserved.
Subjects
Atypical employment
Oaxaca-Blinder decomposition
Permanent contract
Temporary contract
Wage differential
Type
journal article