Is temporary employment a stepping stone for unemployed immigrants?

This study investigates whether temporary employment serves as a stepping stone or a trap for unemployed immigrants and native-born individuals. Using panel data from the Belgian Labour Force Survey and applying a propensity score matching approach, we compare the short-term labour market outcomes of unemployed individuals who enter temporary employment with those who remain unemployed. The findings reveal that accepting temporary work significantly improves employment prospects and increases the likelihood of transitioning to permanent positions, although it does not lead to higher wages. Immigrant job seekers derive similar benefits from temporary employment as their native-born counterparts. From a policy perspective, these results underscore the potential of temporary employment to facilitate the labour market integration of unemployed workers in rigid labour markets like Belgium. However, the findings also highlight disparities among immigrant groups. Insider immigrant groups appear better positioned to leverage temporary jobs as a stepping stone, while outsider groups face greater challenges in doing so. Moreover, temporary agency employment demonstrates a weaker stepping stone effect compared to fixed-term contracts, particularly for immigrant job seekers. Further research is needed to explore how these dynamics manifest in longer-term labour market outcomes.