The Hidden Costs of Fixed-Term Contracts: The Impact on Work Accidents

This paper assesses whether or not there is a systematic difference between the accident rates of fixed-term and permanent contract workers that is not just the result of a compositional effect. A pure contractual effect leading to a higher accident rate might exist because the short duration of the temporary contract reduces the incentives to invest in specific human capital or because effort is higher to increase rehiring probabilities. I provide two identification strategies to control for selection and reporting biases. The results confirm there is a pure contractual effect that increases the accident probability by 5 percentage points.