Education, Earnings, and Fixed-Term Contracts

We explore the relationship between education, earnings and fixed-term contracts using data from the 1997 British Social Attitudes Survey and the 1997 International Social Survey Programme . We find that workers employed under such contracts earn significantly lower wages than their ‘permanent’ contract counterparts, even after controlling for a plethora of personal and job characteristics. This may be indicative of wage discrimination against fixed-term contract employees. On the other hand, our results also highlight some benefits to fixed-term employment such workers are relatively less likely to find work stressful and to return home from work exhausted. In addition, our results allude to possible asymmetries in the relationship between education and earnings across this two-tier system, with educational attainment playing a more prominent signaling role in the case of ‘permanent’ contract employees.