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When Does the Stepping‐Stone Work? Fixed‐Term Contracts Versus Temporary Agency Work in Changing Economic Conditions

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  • Pauline Givord
  • Lionel Wilner

Abstract

This paper focuses on labor market transitions and especially on those involvingfixed-term contracts. Our contribution is twofold: first, we provide an accuratemeasure of labor market transitions; second, we analyze the potential incentive effectof fixed-term contracts on "effort". To deal with unobserved heterogeneity, we use adynamic multinomial logit with fixed effects. We construct an indicator of effort forfixed-term workers, which is basically "working more than siblings". Using Frenchdata, we find that a fixed-term contract provides significantly better perspectivesthan unemployment, but no evidence of any significant impact of exerting effort onthe probability of getting an open-ended contract.
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  • Pauline Givord & Lionel Wilner, 2015. "When Does the Stepping‐Stone Work? Fixed‐Term Contracts Versus Temporary Agency Work in Changing Economic Conditions," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 30(5), pages 787-805, August.
    • Handle: RePEc:wly:japmet:v:30:y:2015:i:5:p:787-805
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    5. 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.
    6. Matsue, Toyoki, 2019. "Employment fluctuations in a dynamic model with long-term and short-term contracts," MPRA Paper 97545, University Library of Munich, Germany.
    7. 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.
    8. Cockx, Bart & Declercq, Koen & Dejemeppe, Muriel & Inga, Leda & Van der Linden, Bruno, 2020. "Switching from an inclining to a zero-level unemployment benefit profile: Good for work incentives?," Labour Economics, Elsevier, vol. 64(C).
    9. Mussida Chiara & Zanin Luca, 2019. "Voluntary Mobility of Employees for Better Job Opportunities Given a Temporary Contract: Insights Regarding an Age-Varying Association Between the Two Events," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 19(2), pages 1-27, April.
    10. Ferreira Sequeda, M.T. & de Grip, A. & van der Velden, R.K.W., 2015. "Does on-the-job informal learning in OECD countries differ by contract duration," Research Memorandum 021, Maastricht University, Graduate School of Business and Economics (GSBE).
    11. Hélène Couprie & Xavier Joutard, 2017. "Atypical Employment and Prospects of the Youth on the Labor Market in a Crisis Context," THEMA Working Papers 2017-08, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
    12. Rowena A Pecchenino & Julie Byrne, 2017. "Heigh Ho, Heigh Ho:The Way We (Would Like to) Work Now," Economics Department Working Paper Series n282-17.pdf, Department of Economics, National University of Ireland - Maynooth.
    13. Thomas Amossé & Corinne Perraudin & Héloïse Petit, 2011. "Mobilité et segmentation du marché du travail : quel parcours professionnel après avoir perdu ou quitté son emploi ?," Économie et Statistique, Programme National Persée, vol. 450(1), pages 79-105.
    14. Thomas Amossé & Corinne Perraudin & Héloïse Petit, 2011. "Formes de rupture d'emploi et trajectoires de mobilités externes," Working Papers halshs-00684101, HAL.
    15. Makoto Masui, 2020. "The determinants of employers’ use of temporary contracts in the frictional labor market," Metroeconomica, Wiley Blackwell, vol. 71(4), pages 803-834, November.
    16. Ferreira, Maria & de Grip, Andries & van der Velden, Rolf, 2018. "Does informal learning at work differ between temporary and permanent workers? Evidence from 20 OECD countries," Labour Economics, Elsevier, vol. 55(C), pages 18-40.
    17. Kahn, Lawrence M., 2012. "Temporary jobs and job search effort in Europe," Labour Economics, Elsevier, vol. 19(1), pages 113-128.
    18. Sam Desiere & Bart Cockx, 2021. "How Effective Are Hiring Subsidies to Reduce Long-Term Unemployment among Prime-Aged Jobseekers? Evidence from Belgium," CESifo Working Paper Series 9325, CESifo.
    19. Jonathan Créchet, 2023. "Risk Sharing in a Dual Labor Market," Working Papers 2307E, University of Ottawa, Department of Economics.
    20. Ki-Dong Lee & Seo-Hyeong Lee & Jong-Il Choe, 2018. "State dependence, individual heterogeneity, and the choice of employment status: evidence from Korea," Applied Economics, Taylor & Francis Journals, vol. 50(8), pages 824-837, February.
    21. Cristini, Annalisa & Origo, Federica & Pinoli, Sara, 2017. "The healthy fright of losing a good one for a bad one," Journal of Economic Psychology, Elsevier, vol. 59(C), pages 129-144.
    22. Simon Beck & Thierry Kamionka, 2012. "Who Benefits from Growth ?," Working Papers 2012-18, Center for Research in Economics and Statistics.
    23. Mihaela-Emilia Marica, 2016. "The profound precariousness of work through temporary work agency," Juridical Tribune (Tribuna Juridica), Bucharest Academy of Economic Studies, Law Department, vol. 6(2), pages 216-227, December.
    24. Carreño Bustos, José Gabo, 2023. "Flexible Contracts as Business Cycle Stabilizers," Discussion Paper 2023-007, Tilburg University, Center for Economic Research.
    25. Chiara Mussida & Luca Zanin, 2020. "I found a better job opportunity! Voluntary job mobility of employees and temporary contracts before and after the great recession in France, Italy and Spain," Empirical Economics, Springer, vol. 59(1), pages 47-98, July.

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    JEL classification:

    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts

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