Is a Temporary Job Better than Unemployment? A Cross-Country Comparison Based on British, German, and Swiss Panel Data

34 Pages Posted: 5 Mar 2013

See all articles by Michael Gebel

Michael Gebel

University of Mannheim - School of Social Sciences; University of Mannheim - Mannheim Centre for European Social Research (MZES)

Date Written: March 2013

Abstract

While many previous studies on temporary work have found disadvantages for temporary workers as compared to workers with a permanent contract, this study compares temporary work to the alternative of unemployment. Specifically, this paper investigates the potential integrative power of taking up a temporary job for unemployed workers as compared to the counterfactual situation of remaining unemployed and searching for another job. Applying a dynamic propensity-score matching approach based on British, (West and East) German, and Swiss panel data during the period of 1991–2009, it is shown that taking up a temporary job increases the employment chances during the subsequent five years in (West and East) Germany and the UK. Moreover, the chances of having a permanent contract remain higher and a persistent wage premium can be found during the subsequent five years of the career. Advantages of taking up a temporary job are slightly stronger in West Germany compared to East Germany, where temporary contracts are often based on public job creation measures with limited integration potential. Neither long-run advantages nor disadvantages of taking up a temporary job can be found in the case of the flexible Swiss labour market.

JEL Classification: C14, C41, J41, J60, J64

Suggested Citation

Gebel, Michael, Is a Temporary Job Better than Unemployment? A Cross-Country Comparison Based on British, German, and Swiss Panel Data (March 2013). SOEPpaper No. 543. Available at SSRN: https://ssrn.com/abstract=2228073 or http://dx.doi.org/10.2139/ssrn.2228073

Michael Gebel (Contact Author)

University of Mannheim - School of Social Sciences ( email )

Germany

University of Mannheim - Mannheim Centre for European Social Research (MZES)

D-68131 Mannheim
Germany

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