Flexible Labor Contracts, Firm-specific Pay, and Wages


In this paper, we use comprehensive employer-employee data for the Netherlands to investigate the labor income effects of flexible labor contracts in two different settings, wage determination as in the AKM model, and an analysis of earnings losses after job displacement. In both settings, we find that flexible contracts lead to lower wages, but that workers with flexible contracts primarily earn less because they work at or join lower paying firms. This implies that the negative effects of flexible contracts on wage income are overstated, if firm-specific pay differentials are not taken into account.

José Gabriel Carreño
José Gabriel Carreño
PhD in Economics

I am a Ph.D. in Economics. Prior to my enrollment as a Ph.D. student, I worked as a research assistant in the Financial Research Unit of the Central Bank of Chile. At the Central Bank, I did research related to financial networks and systemic risk of financial institutions. My current research lies in the intersection between Macroeconomics, Finance, and Labor Economics. I am particularly interested in understanding the macroeconomic implications of different contractual arrangements on the business cycle.