"Using a large data set of German manufacturing establishments and various panel data models, the authors investigate the relationship between labour productivity and the use of fixed-term employment, taking account of the possible distortions that may result from self-selection into the use of fixed-term contracts. Their empirical results provide no evidence for the expected inverse U-shaped relationship between fixed-term employment and labour productivity, and testing for a linear relationship leads to mostly negative coefficients that are only significant in a few specifications. Overall, their results thus indicate that there is no significant relationship between the use of fixed-term contracts and labour productivity."

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