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Are Shorter Cumulative Temporary Contracts Worse Stepping Stones? Evidence from a Quasi-Natural Experiment

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  • Kabátek, Jan

    (University of Melbourne)

  • Liang, Ying

    (University of Mainz)

  • Zheng, Kun

    (Shandong University)

Abstract

Temporary employment contracts are often regarded as 'stepping stones' for workers' careers, because they can help inexperienced workers secure a permanent contract. Our study evaluates whether this stepping-stone function is moderated by the contract duration, exploiting a Dutch policy reform that shortened the maximum duration of sequences of temporary contracts with the same employers from 3 years to 2 years. Leveraging a sharp regression discontinuity design and administrative register data, we show that the reform accelerated the transitions of temporary workers to permanent contracts with the same employers, with the effect being strongest among those working for the same employers for 1-2 years. We conclude that the reform brought more job security to temporary workers without impeding the stepping-stone function of their contracts.

Suggested Citation

  • Kabátek, Jan & Liang, Ying & Zheng, Kun, 2022. "Are Shorter Cumulative Temporary Contracts Worse Stepping Stones? Evidence from a Quasi-Natural Experiment," IZA Discussion Papers 15407, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp15407
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    Cited by:

    1. Irene Ferrari & Jan Kabátek & Todd Morris, 2023. "Longer careers: A barrier to hiring and coworker advancement?," Working Papers 2023:06, Department of Economics, University of Venice "Ca' Foscari".

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    More about this item

    Keywords

    temporary contracts; permanent contract; stepping stone; chain rule;
    All these keywords.

    JEL classification:

    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets

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