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Is Temporary Employment a Stepping Stone for Unemployed School Leavers?

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  • Verhofstadt, Elsy
  • Goebel, Christian

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.

Suggested Citation

  • Verhofstadt, Elsy & Goebel, Christian, 2008. "Is Temporary Employment a Stepping Stone for Unemployed School Leavers?," ZEW Discussion Papers 08-093, ZEW - Leibniz Centre for European Economic Research.
    • Handle: RePEc:zbw:zewdip:7435
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    Cited by:

    1. Christoph Ehlert & Jochen Kluve & Sandra Schaffner, 2012. "Temporary work as an active labor market policy: Evaluating an innovative program for disadvantaged youths," Economics Bulletin, AccessEcon, vol. 32(2), pages 1765-1773.
    2. Jahn, Elke Jutta & Rosholm, Michael, 2015. "The Cyclicality of the Stepping Stone Effect of Temporary Agency Employment," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113117, Verein für Socialpolitik / German Economic Association.
    3. Ehlert, Christoph R. & Kluve, Jochen & Schaffner, Sandra, 2012. "Temporary Work as an Active Labor Market Policy: Evaluating an Innovative Activation Program for Disadvantaged Youths," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 32(2), pages 1765-1773.
    4. Matteo Picchio & Stefano Staffolani, 2019. "Does apprenticeship improve job opportunities? A regression discontinuity approach," Empirical Economics, Springer, vol. 56(1), pages 23-60, January.
    5. Bachmann, Ronald & Beimann, Boris & Bredtmann, Julia & David, Peggy & Ehlert, Christoph & Kassenböhmer, Sonja & Schaffner, Sandra & Siemers, Lars, 2011. "Studies on flexicurity Lot 1: Study on various aspects of labour market performance using micro data from the European Union statistics on income and living conditions (EU-SILC). Contract No. VC/2010/," RWI Projektberichte, RWI - Leibniz-Institut für Wirtschaftsforschung, number 72620, March.
    6. Jahn, Elke J. & Rosholm, Michael, 2010. "Looking Beyond the Bridge: How Temporary Agency Employment Affects Labor Market Outcomes," Working Papers 10-6, University of Aarhus, Aarhus School of Business, Department of Economics.
    7. Giovanni S.F. Bruno & Floro E. Caroleo & Orietta Dessy, 2013. "Stepping stones versus dead end jobs: exits from temporary contracts in Italy after the 2003 reform," Rivista Internazionale di Scienze Sociali, Vita e Pensiero, Pubblicazioni dell'Universita' Cattolica del Sacro Cuore, vol. 121(1), pages 31-62.
    8. Niebuhr, Annekatrin & Buch, Tanja, 2013. "Wage effects of labor market entry via temporary work agency employment - evidence for German apprenticeship graduates," VfS Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79818, Verein für Socialpolitik / German Economic Association.
    9. Jochen Kluve & Christoph Ehlert & Sandra Schaffner, 2011. "Training + Temp Work = Stepping Stone? – Evaluating an Innovative Activation Program for Disadvantaged Youths," Ruhr Economic Papers 0249, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    10. repec:zbw:rwirep:0249 is not listed on IDEAS
    11. Ehlert, Christoph & Kluve, Jochen & Schaffner, Sandra, 2011. "Training + Temp Work = Stepping Stone? – Evaluating an Innovative Activation Program for Disadvantaged Youths," Ruhr Economic Papers 249, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    12. Bofinger, Peter & Buch, Claudia M. & Feld, Lars P. & Schmidt, Christoph M. & Wieland, Volker, 2013. "Gegen eine rückwärtsgewandte Wirtschaftspolitik. Jahresgutachten 2013/14 [Against a backward-looking economic policy. Annual Report 2013/14]," Annual Economic Reports / Jahresgutachten, German Council of Economic Experts / Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung, volume 127, number 201314.
    13. Jahn, Elke J. & Rosholm, Michael, 2014. "Looking beyond the bridge: The effect of temporary agency employment on labor market outcomes," European Economic Review, Elsevier, vol. 65(C), pages 108-125.

    More about this item

    Keywords

    temporary employment; school leavers; labour market policy;
    All these keywords.

    JEL classification:

    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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