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The price of flexible jobs: Wage differentials between permanent and flexible jobs in The Netherlands

Working paper 779
Working Papers

Published: 02 June 2023

Employees with a flexible contract, i.e., those with either a temporary contract, temporary agency workers, or those on a contract with flexible working hours, face more job and income insecurity than employees with a permanent contract. In competitive labor markets, they should be compensated for this uncertainty. In most countries, however, wages of flexible jobs are lower than those of permanent jobs. We find that this is also the case for The Netherlands between 2006 and 2019, in particular for men and higher educated employees. A critique on wage comparisons is that sample selection may lead to biased results. We use two methods to control for sample selection - Regression Adjustment and Propensity Score Matching - and find wage differentials close to our baseline estimates.

Keywords: Wage Gap; Flexible Employment; Earnings; Hourly wages;Wage differential; Non- standard work
JEL codes J31

Working paper no. 779

779 - The price of flexible jobs Wage differentials between permanent and flexible jobs in The Netherlands


Research highlights:

  • We compare wages of flexible and permanent jobs between 2006 and 2019 in The Netherlands
  • Employees with a flexible have lower wages and face more job insecurity
  • We find larger wage penalties of flexible jobs for men and the higher educated
  • Our results are robust to methods correcting for sample selection

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