By Tommaso Tulkens

Abstract

This article analyses the rise of non-standard labour contracts (NSLC) and their effect on working compensation in the Netherlands since the 1970s. The analysis employs two two-way fixed effects models to examine the impact of NSLC on wages and pension benefits. The findings show a wage and pension benefits penalty associated with the adoption of on-call contracts. The wage penalty for on-call work is large even when controlling for hours worked. Temporary contracts are associated with a decrease in pension benefits. Younger and low-income workers face a larger wage penalty when engaging in non-standard employment arrangements. The historical analysis shows that the struggle against unemployment, political choices, union power, and the turn to a liberal market economy drove the trend towards NSLC. Falling transaction costs in firms likely encourage the use of market-mediated work. The findings are discussed in relation to monopsony power.