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Table 13 Probability of cutting permanent and fixed-term employment

From: European firm adjustment during times of economic crisis

 

Permanent employees

Fixed-term employees

 

Probability (% and standard errors)

Difference from baseline (% points and standard errors)

Probability (% and standard errors)

Difference from baseline (% points and standard errors)

Baseline

9.9

 

7.6

 

(3.7)

 

(3.2)

 

Manufacturing

12.4

2.5

8.5

0.9

(4.4)

(1.9)

(3.4)

(1.2)

Trade

13.3

3.4

7.1

−0.4

(4.7)

(2.4)

(3.1)

(1.4)

Large firm

11.0

1.1

16.1

8.6

(3.9)

(2.3)

(5.3)

(3.0)

Strong demand + weak credit shock

19.6

9.8

9.6

2.0

(5.9)

(2.7)

(3.9)

(1.2)

Strong demand + strong credit shock

18.2

8.4

6.2

−1.4

(5.7)

(2.6)

(2.8)

(1.1)

Time-dependent wages

7.9

−2.0

9.7

2.1

(3.2)

(1.3)

(3.8)

(1.3)

Frequent wage adjustment

7.9

−2.0

8.0

0.4

(3.5)

(1.7)

(3.5)

(1.4)

Strong competitive pressures

12.6

2.7

6.3

−1.3

(4.4)

(1.5)

(2.7)

(1.0)

Firm-level collective agreement

10.3

0.5

7.7

0.1

(4.0)

(1.6)

(3.2)

(1.1)

White-collar workers: high (%)

11.3

1.5

4.6

−2.9

(4.3)

(1.9)

(2.3)

(1.4)

High-skilled workers: high (%)

10.7

0.8

6.6

−1.0

(4.1)

(1.8)

(3.0)

(1.2)

Temporary workers: high (%)

9.3

−0.6

10.8

3.2

(3.6)

(1.4)

(4.1)

(1.5)

Labour cost share: high (%)

16.1

6.2

6.7

−0.9

(5.1)

(2.3)

(2.9)

(1.1)

Flexible pay component: high (%)

13.3

3.5

5.7

−1.9

(4.5)

(2.0)

(2.5)

(1.3)

  1. Source: WDN surveys. Note: The table shows predicted probability from probit regressions. Standard errors are shown within parentheses. The baseline case is a Czech firm operating in the business service sector; of small size (5–19 employees); facing weak demand and credit shocks; setting wages without a firm-level, collectively bargained contract and without a particular time pattern at less than yearly frequency; a firm having a workforce with low shares of temporary, white-collar, and high-skilled workers; facing weak competitive pressures; and having a low share of wages in total costs and a low incidence of bonuses