Delay in the Renewal of Labor Contracts In Banking Corporations

IZA Logo

IZA Seminar

Place: Schaumburg-Lippe-Str. 9, 53113 Bonn

Date: 23.07.2002, 12:15 - 13:30


Presentation by 

Leif Danziger (Ben Gurion University)


This paper test two theories of delay in renewal of labor contracts using Israeli data. Since bargaining pairs involving banking corporations are much more similar than other bargaining pairs, the implicit-contract approach predicts that the delay is negatively related to productivity uncertainty for contracts involving banking corporations, while the informational approach predicts that this negative effect is countered by a positive effect for contracts involving banking corporations. The empirical evidence strongly supports both predictions. Productivity uncertainty reduces the average delay by 11 days for contracts not involving banking corporations, but increases the average delay by 24-28 days for contracts involving banking corporations.

For more information, please contact