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Step or trap? Transition from fixed-term contracts in Central Eastern Europe

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  • Pavol Babos

Abstract

This article investigates the transition from fixed-term contracts to permanent jobs from the viewpoint of the 'stepping stone versus trap' theoretical framework. The main contribution of this research is that it examines what function fixed-term contracts have in the EU new member states, countries that have not yet been investigated in this regard. This research tests which individual characteristics influence the transition to permanent employment and how labour market institutions can help in understanding the differences among countries. The analysis covers the eight post-communist countries which joined the EU in 2004. The period analysed is 2005--10. We make use of the EU-SILC dataset and employ multinomial logistic regression to perform the analysis. The findings reveal that, on average, a temporary job is more a trap than a stepping stone, although considerable differences exist across countries. Surprisingly, most of the individual demographic and human capital characteristics do not have an effect on the transition to permanent employment. Only the age category and work experience significantly increase the chances for a successful transition. Institutions such as employment rigidity and industrial relations explain a considerable amount of the country variations. More rigid labour markets and stronger trade unions lower the probability of successful transition. We argue that the reason is that companies use FTCs as a tool to increase flexibility in rigid labour markets. The concluding part discusses some limitations of the research, links it back to the theoretical literature and suggests some challenges for future research.

Suggested Citation

  • Pavol Babos, 2014. "Step or trap? Transition from fixed-term contracts in Central Eastern Europe," Post-Communist Economies, Taylor & Francis Journals, vol. 26(1), pages 39-52, March.
  • Handle: RePEc:taf:pocoec:v:26:y:2014:i:1:p:39-52
    DOI: 10.1080/14631377.2014.874230
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    Cited by:

    1. Matteo Picchio & Mattia Filomena, 2021. "Are Temporary Jobs Stepping Stones Or Dead Ends? A Meta-Analytical Review Of The Literature," Working Papers 455, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
    2. Elvisa Drishti & Bresena Kopliku & Drini Imami, 2022. "Active political engagement, political patronage and local labour markets – The example of Shkoder," International Journal of Manpower, Emerald Group Publishing Limited, vol. 44(6), pages 1118-1142, April.
    3. Drishti, Elvisa, 2021. "Cross-national comparison of job types: analysis using the EU LFS and Albanian LFS," GLO Discussion Paper Series 795, Global Labor Organization (GLO).
    4. Drishti, Elvisa & Carmichael, Fiona, 2022. "Dead-end jobs or steppingstones? Precarious work in Albania," GLO Discussion Paper Series 1011, Global Labor Organization (GLO).
    5. Drishti, Elvisa & Kalaj, Ermira Hoxha & Kopliku, Bresena Dema, 2021. "Efficiency and Distributional Effects of the Two-Tracked Labor Market Institutions in Albania," GLO Discussion Paper Series 837, Global Labor Organization (GLO).
    6. Mariusz Zielinski, 2018. "Effect of the economic situation on employment and its structure in the Central and Eastern European countries," Ekonomia i Prawo, Uniwersytet Mikolaja Kopernika, vol. 17(3), pages 329-337, September.
    7. Perugini, Cristiano & Pompei, Fabrizio, 2017. "Temporary Jobs, Institutions, and Wage Inequality within Education Groups in Central-Eastern Europe," World Development, Elsevier, vol. 92(C), pages 40-59.

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