Determinants of Using Fixed-Term Contracts in the Egyptian Labor Market: Empirical Evidence from Manufacturing Firms Using World Bank Firm-Level Data for Egypt
Journal Title: Journal of Empirical Economics - Year 2015, Vol 4, Issue 1
Abstract
Based on dual labor market theory, fixed-term contracts (FTCs) in the manufacturing sector in Egypt were analyzed to test the following hypothesis: Employers in the manufacturing firms use FTCs to adjust the level of employment to the profit maximizing level in case of demand changes. The hypothesis was not supported by the results of econometric analyses with a firm-level data set from the World Bank Enterprise Surveys for years 2004, 2007 and 2008. Probit and Tobit models were used to estimate the probability and intensity of using different kinds of numerical labor market flexibility. Empirical results revealed that demand changes had no effects on using FTCs in the manufacturing firms in Egypt. Furthermore, the results indicated that demand changes had also no effects on using hiring and firing as labor market flexibility instruments. In the light of knowing the determinants of using FTCs in Egypt, policies can be shaped to introduce incentives to employers in the Egyptian manufacturing firms to use (FTCs).
Authors and Affiliations
Ahmed Fayez Abdelgouad
Keywords
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