Hohendanne , Ch is ian; La ne , Jona han
Resea ch Repo
Fixed- e m employmen con ac s: No nega i e wage
e ec s in he ansi ion o empo a y employmen
IAB Sho Policy Repo , No. 13/2025
P o ided in Coope a ion wi h:
Ins i u e o Employmen Resea ch (IAB)
Sugges ed Ci a ion: Hohendanne , Ch is ian; La ne , Jona han (2025) : Fixed- e m employmen
con ac s: No nega i e wage e ec s in he ansi ion o empo a y employmen , IAB Sho Policy
Repo , No. 13/2025, Ins i u ü A bei sma k - und Be u s o schung (IAB), Nü nbe g,
h ps://doi.o g/10.48720/IAB.KB.2513.en
This Ve sion is a ailable a :
h ps://hdl.handle.ne /10419/324912
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In b ie
IAB Sho Policy Repo
Up- o-da e analyses by IAB
●Fixed- e m employmen con-
ac s became less impo an in
ecen yea s and he chances o
ansi ioning in o pe manen con-
ac s we e good. Howe e , since
2024, wi h he weak and unce ain
economy, pe manen con ac s a e
on he decline and ixed- e m con-
ac s a e mo e ele an again.
●In e ms o labo ma ke policy,
ixed- e m con ac s a e con o e -
sial because hey a e associa ed
wi h poo ca ee and wage de e-
lopmen .
●Howe e , a ecen IAB s udy
shows ha ixed- e m con ac s
a e no necessa ily associa ed wi h
wage losses. Nei he he ansi ion
om ixed- e m o pe manen em-
ploymen no ice e sa leads o
wage educ ions. In addi ion, bo h
ypes o con ac s o e he unem-
ployed simila oppo uni ies o
in eg a ion.
●I is also clea ha he wage e ec
o a ixed- e m con ac is mo e e-
la ed o an employee’s u u e ca ee
ajec o y han he con ac i sel .
●When e alua ing empo a y job
o e s, i is no only he di ec wage
di e ences ha a e ele an , bu
also he po en ial o u u e ca ee
de elopmen .
13| 2025
Compa ed o pe manen employmen
con ac s, ixed- e m con ac s a e less
a ac i e. Howe e , a ecen IAB s udy
shows ha ixed- e m con ac s a e no
necessa ily disad an ageous, e en i pe -
manen con ac s a e p e e able om
he employees’ poin o iew. The decisi-
e ac o s a e less ela ed o he con ac
ype and mo e ela ed o an indi idual’s
ca ee and p o essional de elopmen .
Pa icula ly in economically unce ain
imes, i is wo h aking ano he look a
he a ious o ms o employmen .
Cu en de elopmen
Fixed- e m employmen con ac s beca-
me less common in Ge many in ecen
yea s. One possible eason is a shi in
labo ma ke condi ions: employe s now
ace g ea e compe i ion o wo ke s,
a he han being able o choose om
a la ge pool o applican s as in he pas .
When illing acancies becomes mo e
di icul , employe s a e mo e likely o e-
hink hei hi ing s a egies (Hohendan-
ne /Ge ne 2010).
Acco ding o he IAB Es ablishmen
Panel (see In obox on page 4), a ound
3.2 million employees o 8.3 pe cen o
he wo k o ce held a ixed- e m con ac
Fixed- e m employmen con ac s
No nega i e wage e ec s in
he ansi ion o empo a y
employmen
by Ch is ian Hohendanne and Jona han La ne
Sou ce: Own illus a ion. © IAB
Bo h ypes o con ac s ha e a simila
e ec when s a ing a job
A1
€ + 9.14
Fixed- e m
con ac
€ + 10.17
Pe manen
con ac
Unemploymen
Wage inc ease
du ing he
ansi ion o
employmen
in 2018. By 2023, ha numbe ell o 2.4 million, o
jus 5.8 pe cen . Hi ing on ixed- e m con ac s also
declined since 2018. In 2023 and 2024, less han a
hi d o con ac s (31.3 % and 31.4 %) we e ini ially
ixed- e m, compa ed o 44.1 pe cen in 2018 (see
Figu e A2). Ne e heless, hese hi ing a es show
ha ixed- e m employmen con ac s con inue o
play an impo an ole in he labo ma ke .
A look a in e nal ansi ions om ixed- e m o
pe manen con ac s also indica e ha labo ma -
ke condi ions wo sened sligh ly in 2024. The sha e
o ixed- e m employees who ecei ed a pe manen
con ac ell om a ound 50 pe cen in 2023 o 43
pe cen in 2024. A he same ime, ex ensions o
ixed- e m con ac s inc eased om 29 o 34 pe -
cen , and s a depa u es ose om 21 o 23 pe cen .
Fewe ansi ions in o pe manen employmen and
mo e ex ensions o empo a y con ac s likely con-
ibu ed o he ise in he o e all sha e o ixed- e m
con ac s, which inc eased om 5.8 o 6.3 pe cen .
Fixed- e m con ac , lowe sala y?
The ime se ies in Figu e A3 (page 3) show ha
ixed- e m con ac s o en lead o pe manen em-
ploymen . Howe e , he e is always a isk ha he
con ac is nei he ex ended no con e ed. F om
a labo ma ke policy pe spec i e, i emains im-
po an o examine how ixed- e m con ac s a ec
employmen ajec o ies. This includes no only
he ques ion o whe he ixed- e m jobs se e as a
s epping s one o pe manen employmen o ap
wo ke s in uns able ca ee s, bu also whe he hey
ha e an impac on wages.
The e a e good easons why ixed- e m con ac s
migh bene i employe s. They make i easie o
hi e in unce ain si ua ions and, in some cases, al-
low employe s o es a wo ke ’s i be o e o e ing
a pe manen posi ion. A he same ime, conce ns
pe sis abou pay and wo king condi ions o em-
ployees in ixed- e m oles. These conce ns o en
ocus on whe he ixed- e m jobs ac ually lead o
pe manen employmen and whe he ha ansi i-
on comes wi h a wage inc ease.
Bo h pe spec i es – ixed- e m con ac s as a ap
wi h nega i e wage e ec s o as a b idge o be e
oppo uni ies – a e suppo ed by heo y and empi-
ical e idence. Howe e , esea ch indings emain
mixed (Filomena and Picchio 2022; La ne and
Saks 2022).
No es: The p opo ion o ixed- e m employmen ela ionships ela e o o al company employmen excluding ainees (1996 including ainees). In addi ion o blue-colla and whi e-colla emplo-
yees subjec o social secu i y con ibu ions, i also includes employees no subjec o social secu i y con ibu ions (ci il se an s/candida e ci il se an s, ac i e p op ie o s and amily wo ke s)
as well as ma ginal and o he employees. The p opo ions o empo a y hi es in ela ion o all hi es apply o he i s hal o he espec i e yea ; no in o ma ion is a ailable o 1996 and 2000.
Sou ce: IAB Es ablishmen Panel, ex apola ed alues, o mo e in o ma ion see Hohendanne (2025). © IAB
De elopmen o ixed- e m employmen and ixed- e m hi ing in Ge many
1996 o 2024, absolu e in housands o people and sha es in pe cen
A2
1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024
0
3,500
500
1,000
1,500
2,000
2,500
3,000
0
70
10
20
30
40
50
60
in 1,000
Tempo a y employees
Tempo a y hi es
in pe cen
Tempo a y employees
Tempo a y hi es
2IAB Sho Policy Repo 13|2025
o ind and e ain quali ied wo ke s and also help
employees o mo e in o pe manen jobs wi h hig-
he wages.
Howe e , he eali y o hese wo heo e ical ap-
p oaches emains unclea (La ne /Saks 2022). In
he ap scena io, i is no clea how ixed- e m
con ac s can send a nega i e signal o new emplo-
ye s and hus inc ease he isk o being „ apped”.
Unlike o he p o essional cha ac e is ics, con ac
ype is no o en s a ed on a esume and he e o e
no obse able. In he b idge scena io, employe s
usually de e mine in ad ance whe he a job ad e -
isemen is o a pe manen posi ion, a ixed- e m
posi ion, o a p oba iona y posi ion (i.e. emp o
pe m). The e o e, a con ac wi h an ex ended p o-
ba iona y pe iod is usually a cha ac e is ic o he
job and no o he pe son.
In con as o heo e ical app oaches ha lead o
ei he he b idge o he ap scena io, he heo y o
compensa ing di e ences p o ides di e en ia ed
p edic ions abou he wage e ec s o ansi ions
in o and ou o ixed- e m con ac s. The basic idea
o he heo y is ha he unce ain y o con ac s is
a nego iable good (Rosen 1986; Smi h 1776).
Employees who swi ch om a pe manen o a
ixed- e m job, i.e. who accep a highe le el o em-
Wha does he heo y say?
Economic and sociological heo ies o ixed- e m
employmen o en ocus on wo con as ing ex-
plana ions o wage di e ences be ween con ac
ypes. In he ap scena io, empo a y jobs lead o
uns able ca ee s and lowe wages o e ime. In he
b idge scena io, hey p o ide access o pe manen
jobs and upwa d wage mobili y. Howe e , when
s udying he wage e ec s o ansi ions in o o ou
o ixed- e m employmen , a hi d heo e ical ap-
p oach may be mo e ele an . This is he heo y o
compensa ing wage di e en ials, o iginally de e-
loped by Adam Smi h (1776).
This heo y s a es ha di e ences in job quali y
can be balanced h ough di e ences in wages o
bene i s. Theo e ically, jobs wi h lowe secu i y o
less a o able condi ions can o e highe wages
o addi ional bene i s. Employe s may o e ixed-
e m con ac s a a wage p emium o compensa e
o he unce ain y hese con ac s in ol e. In his
amewo k, wage di e ences e lec a ade-o :
wo ke s accep less secu i y in exchange o be e
pay.
Theo e ical app oaches ha suppo he „ em-
po a y employmen as a ap” scena io a e based
on he simpli ied assump ion ha he labo ma ke
is di ided in o wo segmen s. The p ima y segmen
o e s pe manen con ac s and highe wages. I
is used by employe s o co e he long- e m de-
mand o wo ke s. The seconda y segmen o e s
ixed- e m con ac s and lowe wages. Employe s
use i o egula e sho - e m luc ua ions in labo
demand. Acco ding o he heo y, employees in
he seconda y segmen send a nega i e signal o
employe s abou p oduc i i y and employees a e
„ apped” in he seconda y ma ke .
Theo e ical app oaches ha suppo he „ ixed-
e m con ac as a b idge” scena io a e based on
he idea o a lexible labo ma ke wi h ewe ba -
ie s o hi ing and dismissal. Fo employe s, ixed-
e m con ac s o e a way o adjus s a ing le els
and e alua e new employees be o e making a
long- e m commi men . Fo employees, empo a-
y con ac s p o ide a chance o gain expe ience,
build a ack eco d, and mo e in o mo e s able
and be e -paid posi ions. Acco ding o he heo y,
ma ching p ocesses make i easie o employe s
No e: The sha es o ansi ion/ex ension/s a depa u es ela e o ixed- e m con ac s ha con e ed in o pe -
manen con ac s o ex ended wi hin he company in he i s hal o he espec i e yea o hose ha expi ed
and esul ed in a depa u e om he company.
Sou ce: IAB Es ablishmen Panel, ex apola ed alues, o mo e in o ma ion see Hohendanne (2025). © IAB
T ansi ion in o pe man con ac , ex ensions o ixed- e m con ac s
and s a depa u es om ixed- e m con ac s
in pe cen
A3
0
10
20
30
40
50
60
2010 2012 2014 2016 2018 2020 2022 2024
T ansi ion in o
pe manen con ac
Ex ension o
ixed- e m con ac S a depa u es
3IAB Sho Policy Repo 13|2025
ploymen unce ain y, should ecei e in compen-
sa ion highe wages o highe wage g ow h o e
he cou se o hei wo king ca ee . Managemen
posi ions, o example, a e o en empo a y and
highly emune a ed due o he p ominen na u e
o he job. Howe e , he managemen posi ions
men ioned by way o example only accoun o a
small p opo ion o ixed- e m con ac s.
Theo e ically, he opposi e is also ue. Emplo-
yees who swi ch om a ixed- e m o a pe manen
employmen con ac – i.e. a gain in employmen
secu i y, should ecei e in compensa ion lowe wa-
ges. Economic heo y o en e e s o he concep
o implici con ac s in his con ex . Acco ding o
his, employees accep a lowe wage as a hedge
agains he isk o losing hei job, bu he e is li le
empi ical e idence o his (Hagen 2002). Ano he
possibili y is ha job secu i y is exchanged o „hu-
man capi al” and no o „wages”. In o he wo ds,
he employees ecei e g ea e job secu i y on he
basis o hei skills and p o essional expe ience.
This co ela ion also explains why pe manen wo -
ke s a e mo e o en o e quali ied han empo a y
wo ke s (O iz 2010).1
I is known om nume ous p e ious s udies ha
wo ke s in empo a y jobs ea n less han hose in
pe manen jobs. Howe e , hese analyses did no
ake in o accoun how people a i ed a hese jobs.
Fo he s udy p esen ed he e, he wage e ec s o
di e en ca ee s eps we e examined, including
he ansi ion om unemploymen o a empo a y
o pe manen job and he change be ween em-
po a y and pe manen posi ions. By ocusing on
hese ansi ions o e ime, a he han simply
compa ing employmen con ac s a a speci ic
poin in ime, he analysis shown he e p o ides
new insigh s in o whe he ixed- e m con ac s ac-
ually lead o lowe wages.
Posi i e wage e ec s e en wi h
empo a y employmen
The esul s in Figu e A4a (page 5) shows ha a
ansi ion om a ixed- e m o a pe manen job
inc eases hou ly wages by an a e age o 0.62 eu-
os (see In obox o he calcula ion o hou ly wa-
ges). A ansi ion in he opposi e di ec ion, om
a pe manen o a ixed- e m con ac , also leads
o a wage inc ease, bu o a lesse ex en a 0.08
eu os. The di e ence be ween hese wo e ec s
is s a is ically signi ican . The e o e, e en i he
Da a and me hodological no es
● The IAB Es ablishmen Panel
The IAB Es ablishmen Panel is a ep esen a i e employe su ey on ope a ional de e -
minan s o employmen . The su ey has been conduc ed annually in Wes Ge many
since 1993 and in Eas Ge many since 1996 on behal o he Ins i u e o Employmen
Resea ch (IAB). Cu en ly, a ound 15,000 companies o all sec o s and sizes a e su -
eyed na ionwide on a a ie y o employmen policy opics. The su ey akes place in
he middle o each yea . The esul ing es ima es om andom samples a e no exac
due o adminis a i ely ecoded alues, and he e o e con ain a ce ain deg ee o im-
p ecision.
Fo u he in o ma ion, see Hohendanne (2025).
●Da a and sample o he s udy by La ne (2024)
The explana ion on he wage e ec s o ansi ions be ween di e en o ms o employ-
men a e based on he s udy by La ne (2024), in which a panel da a app oach om
2000 o 2018 was used o eigh coun ies. The empi ical esul s o Ge many we e
based on he DIW Socio-Economic Panel (SOEP). Fo his analysis, he s udy pe iod o
Ge many was ex ended o he yea 2022 (2000 o 2022). The e a e wo main c i e ia o
inclusion in he sample in he analyses. Fi s ly, only people o p ime wo king age (25
o 54 yea s) a e conside ed, as olde and younge employees a e mo e likely o ha e a
ixed- e m con ac olun a ily. Second, indi iduals mus pa icipa e in he su ey o
a leas h ee consecu i e yea s, so ha we can obse e hem in he pe iod be o e he
ansi ion, du ing he ansi ion and a leas a one pe iod a e he ansi ion.
●Me hods
The s udy by La ne (2024) is he i s s udy o use an asymme ic ixed-e ec s model
(AFE model) wi h a dummy impac unc ion (DIF) o es ima e he e ec s o empo a y
employmen ansi ions on income (Allison 2019). In gene al, he ad an age o ixed-
e ec s models is ha hey con ol o all ime-in a ian di e ences wi hin indi iduals,
such as unobse able cha ac e is ics such as skills o mo i a ion ha could in luence
bo h employmen ansi ions and wages. Howe e , he disad an age o s anda d ixed-
e ec s models is ha hey assume pa allel ends, igno e he di ec ion and iming o
ansi ions and do no model dynamics o e ime. The AFE-DIF app oach add esses all
h ee limi a ions and he e o e p o ides a mo e lexible and in o ma i e amewo k o
analyzing employmen ansi ions o e ime.
●Calcula ion o hou ly wages
All wages a e adjus ed o in la ion and a e based on he Wo ld Bank’s p ice index. This
allows income alues om he pe iod 2000 o 2022 o be con e ed in o compa able
eu o amoun s o 2010. Fo example, an hou ly wage o € 9.14 in 2010 – mul iplied by
he in la ion ac o o 1.245 – co esponds o a alue o € 11.40 in 2022. E en a e his
adjus men , howe e , he wages a e below he cu en s a u o y minimum wage in
Ge many. One o he main easons o his is he me hod o calcula ion: The hou ly
wage is calcula ed by di iding he annual wage by he ac ual hou s wo ked in he yea
– no by he con ac ually ag eed wo king hou s. In he sample, in which ou lie s we e
excluded and only people wi h a wo king week o be ween 10 and 80 hou s we e aken
in o accoun , mo e han hal o he esponden s s a ed ha hey wo ked mo e han 40
hou s pe week. This esul is consis en wi h p e ious s udies, such as Ba bie i and
Cu uli (2018).
1
1 In his case, o e quali ica ion is de ined as he possession o a
highe educa ional quali ica ion han he highes quali ica ion e-
qui ed o a pa icula job. The le el o educa ion ypically equi ed
o each occupa ional g oup is measu ed acco ding o he ISCED
classi ica ion (O iz 2010).
4IAB Sho Policy Repo 13|2025
wage e ec o ansi ions om a ixed- e m o a
pe manen con ac a e mo e posi i e, ansi ions
om a pe manen in o a ixed- e m con ac do no
educe wages.
P e ious esea ch indica ed ha ixed- e m con-
ac s lead o lowe wages. Howe e , he cu en
esul s show ha he nega i e e ec ound in p e-
ious s udies is be e unde s ood as a di e ence
be ween wo ypes o ansi ions ( om ixed- e m
o pe manen and ice e sa), nei he o which a e
nega i e, bu one o he wo ansi ions ( om ixed-
e m o pe manen ) is mo e posi i e e ec han he
o he .
This can be illus a ed wi h he ollowing ex-
ample: Assume ha pe sons A and B s a wi h an
a e age g oss hou ly wage o 20.00 eu os. Pe son A
changes om a ixed- e m o a pe manen con ac
and hei hou ly wage ises o 20.62 eu os. Pe son B
changes om a pe manen o a ixed- e m con ac
and hei hou ly wage inc eases o 20.08 eu os.
Bo h pe sons eco d a wage inc ease, al hough he
immedia e wage inc ease is signi ican ly highe o
pe son A wi hou aking in o accoun he u he
employmen ca ee . This example will be e e ed
o again la e when he wage dynamics o e ime
a e examined.
Wha is he pic u e o he ansi ion om un-
employmen o employmen (see Figu e A4b)? The
es ima ed e ec o a ansi ion om unemploymen
in o a ixed- e m con ac inc eases wages by 9.14
eu os pe mon h om unemploymen wi h a wage
o 0 eu os (unemploymen bene i o basic secu i y
bene i s a e no included as wages in he analysis).
The es ima ed e ec o a ansi ion om unemploy-
men in o a pe manen con ac leads o a wage
inc ease o 10.17 eu os. The di e ence be ween
he wo alues is s a is ically signi ican . Fo he
unemployed, ansi ion in o a pe manen con ac
a e p e e able o ansi ions in o a ixed- e m con-
ac . Howe e , he di e ence is no e y la ge (1 €
o 10 %) and dec eases o e ime, as shown below.
Wage dynamics o ansi ions o e ime
Beyond he wage e ec s a he ime o he ansi-
ion om unemploymen o employmen o be -
ween a ixed- e m and a pe manen con ac , i is
also ele an how wages de elop o e ime. I is
concei able ha employees accep ixed- e m con-
ac s in an icipa ion o la e wage inc eases.
In he case o ansi ions be ween di e en ypes
o con ac s, wages con inue o ise a e bo h an-
si ions, om ixed- e m in o pe manen con ac s
and om pe manen in o ixed- e m con ac s (see
Figu e A5a, page 6). The e o e, ou yea s a e ei -
he ansi ion, he e is no nega i e wage e ec . A
he same ime, wage e ec s o e ime a e mo e
posi i e o ansi ions om ixed- e m in o pe -
manen con ac s han ansi ions om pe manen
in o ixed- e m con ac s.
Looking a he example o he wo compa a i e
pe sons A and B, i can be seen ha a e pe son
A swi ched om a ixed- e m o a pe manen con-
ac , hei hou ly wage ose om 20.00 o 20.62
eu os in he yea o he ansi ion. Fou yea s la e ,
hei wages ose by 6 pe cen o 21.20 eu os pe
hou . Pe son B, on he o he hand, swi ched om
an pe manen o a ixed- e m con ac and saw a
sligh inc ease in pay om 20.00 o 20.08 eu os pe
hou in he yea o ansi ion. Fou yea s la e , hei
wages ose by 2 pe cen o 20.40 eu os pe hou .
The e o e, e en i ansi ions in o a pe manen
con ac has a mo e posi i e wage e ec , ansi-
1) The e ec o ansi ions om pe manen in o empo a y employmen is no s a is ically di e en om 0.
Sou ce: La ne (2024). © IAB
Es ima ed wage e ec s o ansi ions be ween di e en con ac ypes
and employmen s a uses
Change in hou ly wages in Eu os
A4
b) T ansi ions ou o unemploymen a) T ansi ions be ween con ac ypes
0
2
4
6
8
10
–0.2
0
0.2
0.4
0.6
0.8
… in o empo a y
employmen
... in o pe manen
employmen
F om pe manen
in o ixed- e m
employmen 1)
F om ixed- e m
in o pe manen
employmen
5IAB Sho Policy Repo 13|2025
ions in o a ixed- e m employmen ela ionship
also lead o wage inc eases o e ime.2
Figu e A5b shows he wage e ec s o ansi ions
om unemploymen in o ixed- e m o pe manen
con ac s o e ime. The e ini ially appea s o be
a decline in wages a e he ansi ion o a ixed-
e m o pe manen con ac , bu his is due o he
ac ha many p e iously unemployed people be-
come unemployed again a e aking up ixed- e m
o pe manen employmen . While he wage di e-
ence be ween ansi ions ou o unemploymen
and in o ixed- e m o pe manen con ac s is s a i-
s ically signi ican , he o e all gap emains modes ,
a ound € 1 o 10 pe cen . Ye , e en a € 1 di e ence
can ma e in he low-wage sec o , whe e po e y
isks a e high. The e o e, empo a y con ac s may
no o e he same le el o in eg a ion as pe ma-
nen ones, bu hey s ill ep esen a meaning ul
oppo uni y o hose p e iously unemployed.
Summa y and conclusion
The aim was o analyze cu en de elopmen o
ixed- e m con ac s in Ge many and examine he
e ec s o ixed- e m con ac s on wages. T adi io-
nally, wo pe spec i es on hese e ec s domina ed
he li e a u e: The b idge pe spec i e assumes ha
ixed- e m con ac s help people gain a oo hold in
he labo ma ke and mo e up. The ap pe spec i-
e assumes ha ixed- e m con ac s a e de imen-
al o long- e m employmen ca ee s. This s udy
akes a di e en me hodological and heo e ical
app oach by ocusing on he wage e ec s o ansi-
ions in o ixed- e m and pe manen employmen
based on he heo y o compensa ing di e ences
and using panel da a.
A he ime o he job change, mo ing om a
ixed- e m o a pe manen con ac esul s in la -
ge wage gains han mo ing in he opposi e di ec-
ion. Howe e , nei he ype o ansi ion leads o a
wage loss. A simila pa e n holds o ansi ions
om unemploymen in o employmen . En e ing a
pe manen con ac b ings highe wage gains han
en e ing a ixed- e m con ac , al hough he o e -
all di e ence emains modes .
O e ime, wages con inue o g ow a e bo h
ypes o ansi ions. Long- e m wage gains a e g e-
a e o hose who mo e in o pe manen con ac s,
Quelle: La ne (2024). © IAB
Es ima ed wage e ec s o di e en ansi ions o e ou yea s a e he ansi ion
Change in hou ly wages in Eu os
A5
–0.2
1.2
0
0.2
0.4
0,6
0.8
1.0
1.4
0
2
4
6
8
10
… in o empo a y employmen
… in o pe manen employmen
F om pe manen in o ixed- e m employmen
F om ixed- e m in o pe manen employmen
1 2 3 40
1 2 3 40
Yea s since he ansi ion
a) T ansi ions be ween con ac ypes b) T ansi ions ou o unemploymen
Yea s since he ansi ion
2 Whe he pe son B was con inuously employed on a ixed- e m
basis du ing his pe iod o whe he hey ansi ioned in o a pe ma-
nen employmen ela ionship emains open in his analysis. The
ocus is on he isola ed conside a ion o a ansi ion and i s sho -
e m wage e ec s. One could use a sequence analysis o desc ip-
i ely e alua e di e en ypes o ca ee pa e ns, such as epea ed
empo a y („chain con ac s”), bu would limi he abili y o make
causal claims (Fause 2020).
6IAB Sho Policy Repo 13|2025
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Bibliog aphy
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Hohendanne , Ch is ian; Ge ne , Hans-Die e (2010): The
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2024: Cu en esul s om he IAB Es ablishmen Panel
2024. Cu en da a 17.7.2025.
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wages: The case o empo a y employmen . Resea ch in
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empo a y employmen on wages is no nega i e: A
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S a i ica ion and Mobili y, ol. 92.
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bu ixed- e m con ac s also show s eady wage
g ow h in he yea s ha ollow. The same applies
o ansi ions om unemploymen . Pe manen
con ac s lead o mo e posi i e wage ajec o ies
han ixed- e m ones, bu he di e ence emains
ela i ely small.
The me hods used in his analysis explains p e-
ious esea ch indica ing nega i e wage e ec s o
ixed- e m con ac s. These e ec s a e be e un-
de s ood as he di e ence be ween wo ansi ions,
nei he o which esul s in a wage loss, e en i one
is mo e posi e han he o he . T ansi ions in o
pe manen con ac s b ing a clea wage ad an-
age, while ansi ions in o ixed- e m con ac s
do no lead o a disad an age. Mo eo e , he ini-
ially small wage gains associa ed wi h ixed- e m
con ac s end o g ow o e ime, e en i he wage
e ec s o e ime o mo ing in o pe manen con-
ac s emain mo e posi i e.
The e o e, ansi ions in o pe manen con ac s
emain he p e e able op ion, bo h a he ime o
he ansi ion and o e ime. This esul is consis-
en wi h p e ious s udies. The con ibu ion is ha
he e is no nega i e wage e ec in he ansi ion o
empo a y employmen .
Th ee impo an labo ma ke policy indings ol-
low om hese esul s:
●Fo jobseeke s, nei he he ansi ion om em-
po a y o pe manen employmen no he e e se
is associa ed wi h a loss o pay. In addi ion, bo h y-
pes o con ac o e compa able oppo uni ies o
unemployed people o ( e)en e he labo ma ke .
●Fo ca ee s ad iso s, he esul s also show ha
he ansi ion om a ixed- e m o a pe manen
con ac b ings wi h i he s onges wage g ow h.
This unde lines he impo ance o guiding emplo-
yees owa ds s able employmen .
●Fo poli ical decision-make s, he esul s show
he need o egula ions and in e en ions ha
acili a e ansi ions in o pe manen con ac s. I
is c ucial o he s abili y o he labo ma ke ha
ixed- e m con ac s do no ac as a ap, bu as a
b idge.
D . Ch is ian Hohendanne
is an employee in he
depa men o „Es ablishmen s
and Employmen “ a he IAB.
Ch is ian.Hohendanne @iab.de
D . Jona han La ne
is an employee in he
depa men o „Joblessness
and Social Inclusion“ a he IAB.
Jona han.La ne @iab.de
7IAB Sho Policy Repo 13|2025
