Labour contracts and performance of Cameroonian firms

Abstract

The study evaluated employees’ productivity in relation to their contract status. It used survey data collected among manufacturing sector firms, having more than 15 employees, in Cameroon between April and May 2006; and information issued by the National Institute of Statistics. Information collected concerned 45 firms which spanned 2003 to 2005. This study used the stochastic production frontier, it distinguished employees holding fixed-term contract (FTC) from those without fixed-term contracts (indefinite-term contract (ITC)). Results were estimated at two stages. First, we evaluated the determinants of the utilisation of FTC workers and second, we estimated the level of efficiency and productivity of two types of workers. Empirical results indicated that employees holding FTC were twice more productive than those holding ITC. Likewise, the parameters which indicated returns to scale was 1.3. This parameter, though not significant, was greater than one which indicated constant returns to scale in the firm production function.

Keywords: Labour contract, Fixed-term contract, Indefinite-term contract and Production frontier.

JEL Classification: J41, J82, L25