Is Temporary Employment a Stepping Stone for Unemployed School Leavers?

38 Pages Posted: 10 Dec 2008

See all articles by Christian Goebel

Christian Goebel

Catholic University of Louvain (UCL); ZEW – Leibniz Centre for European Economic Research

Elsy Verhofstadt

Ghent University

Date Written: 2008

Abstract

Many school-leavers enter the labour market via temporary employment. In this paper we investigate the impact of a temporary employment spell at the start of the career on the transition rate into permanent employment. We compare the case of temporary employment to the hypothetical case of a direct transition from unemployment to permanent employment. In order to control for selective participation in temporary employment we include a large set of explanatory variables which have been especially collected to study school-leavers. We apply the AIC-information criterion to select the appropriate specification for unobserved heterogeneity. Based on the information criteria we conclude that given our data, there is no support for a model with selection in unobserved characteristics. Simulation exercises provide insights into the development of the effect of temporary employment over time. For a sample of unemployed Flemish school-leavers we find that in the short run temporary employment delays the school leaver's transition to permanent employment. However, in the long run temporary employment acts as a stepping stone and decreases the duration until permanent employment.

Keywords: temporary employment, school leavers, labour market policy

JEL Classification: J41, J64, J08

Suggested Citation

Goebel, Christian and Goebel, Christian and Verhofstadt, Elsy, Is Temporary Employment a Stepping Stone for Unemployed School Leavers? (2008). ZEW - Centre for European Economic Research Discussion Paper No. 08-093, Available at SSRN: https://ssrn.com/abstract=1314247 or http://dx.doi.org/10.2139/ssrn.1314247

Christian Goebel (Contact Author)

Catholic University of Louvain (UCL) ( email )

Place Montesquieu, 3
Louvain-la-Neuve, 1348
Belgium

HOME PAGE: http://homepages.econ.ucl.ac.be/goebel/

ZEW – Leibniz Centre for European Economic Research ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034
Germany

Elsy Verhofstadt

Ghent University

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