Temporary employment and further training. Does training promote the transition from temporary to permanent employment?

The article analyses the returns to further training courses among a vulnerable group: the temporary employed. We address the important question of whether non-formal further training promotes the transition to permanent work and thus helps to escape precarious employment trajectories. According to human capital theory, workrelated training increases workers’ productivity and might also serve as a positive signal to employers, as signaling theory suggests. On the other hand, firms may combine training and transitions to permanent jobs for selected workers. We use data from the German Educational Panel Study and apply event history models to test these conflicting theoretical assumptions. In general, the results suggest positive effects of non-formal further training on transitions to permanent work. Especially employer-funded training shows a strong correlation with transitions within the same firm, but not with transitions to other firms. This seems to be both due to signaling of motivation and firm internal pathways that combine training and transitions. Individual, self-funded training on the other hand does not seem to affect any transition chances further indicating that firm-internal mechanisms are more important than human capital development.