First of all both contractor and permanent employee can work full time (or part time). So my discussion is really about contractor vs. permanent position.
in my field, in some countries, contractors can make up to 3 times of the money that a permanent employee at a similar position would after all the tax deductions. This may be the result of both higher hourly rate and flexibility of filing tax.
From my experience, regardless of being contractor or permanent you need a good solid skill set in order to progress in your career. THe difference is that being permanent has a potential to move into managerial roles one day, while contractors may target to establish themselves as some sort of technical experts. It is also the case that if you have worked as a contractor only for a long time, it would be very unlikely for you to be hired as a manager.
Another point needs to consider is that if you decide to be a contractor, you may find yourself doing the same thing over and over because, like other people said, contractors are mainly hired for their past experience, not for their potential. There are always people out there who have the right experience. So you may not get opportunity to learn new things in your contract work. When you are in your 50s you may even find yourselves have to listen to some ignorant people in their 20s to tell you what to do. If you want to be long term contractor, you may need to develop a kind of emotional detachment to your job (not to your work).
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