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School-to-work transitions in Europe: Paths towards a permanent contract

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  • Garrouste, Christelle
  • Loi, Massimo

Abstract

In a context of intensive and global economic competition, European countries are growingly concerned with the consequences of increasing numbers of young people temporarily or permanently prevented from entering the job market and the difficulties faced by college and university graduates to find adequate employment. This study is concerned with analyzing the speed of transition of students to permanent employment as a proxy of professional stability, and by identifying possible discriminatory effects in selected countries. The research questions are addressed with a Cox survival model and a continuous-time Markov chain model where each individual can transit non-sequentially between the following Markov states: (1) education; (2) inactivity; (3)unemployment; (4) fixed-term/temporary employment; and (5) permanent employment (the 5th state being a non-absorbing steady state). The model is tested using the longitudinal ECHP data in thirteen EU member countries, over the period 1994-2001, controlling for individual and household characteristics and labour market characteristics (e.g., youth employment rate and share of temporary contracts). Overall, we find that the Mediterranean countries are the ones where the transition is the most hazardous both in terms of length and number of steps, but that in other countries, the speed of convergence is not necessarily correlated to the number of spells at intermediate states. Moreover, we find that the gender discrimination that affected most of the countries at the beginning of the 1990s, faded away by the end of the decade, replaced by a positive discrimination in favour of the graduates from vocationally oriented programmes.

Suggested Citation

  • Garrouste, Christelle & Loi, Massimo, 2011. "School-to-work transitions in Europe: Paths towards a permanent contract," MPRA Paper 37167, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:37167
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    File URL: https://mpra.ub.uni-muenchen.de/37167/1/MPRA_paper_37167.pdf
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    References listed on IDEAS

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    1. Zvi Eckstein & Kenneth I. Wolpin, 1995. "Duration to First Job and the Return to Schooling: Estimates from a Search-Matching Model," Review of Economic Studies, Oxford University Press, vol. 62(2), pages 263-286.
    2. Quintini, Glenda & Martin, John P. & Martin, Sébastien, 2007. "The Changing Nature of the School-to-Work Transition Process in OECD Countries," IZA Discussion Papers 2582, Institute for the Study of Labor (IZA).
    3. Bosch, Mariano & Maloney, William F., 2010. "Comparative analysis of labor market dynamics using Markov processes: An application to informality," Labour Economics, Elsevier, vol. 17(4), pages 621-631, August.
    4. Devine, Theresa J. & Kiefer, Nicolas M., 1991. "Empirical Labor Economics: The Search Approach," OUP Catalogue, Oxford University Press, number 9780195059366.
    5. Voicu, Alexandru, 2005. "Employment dynamics in the Romanian labor market. A Markov chain Monte Carlo approach," Journal of Comparative Economics, Elsevier, vol. 33(3), pages 604-639, September.
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    Cited by:

    1. Gunther Tichy, 2014. "Flexicurity – A Concept Doomed to Failure," WIFO Monatsberichte (monthly reports), WIFO, vol. 87(8), pages 537-553, August.
    2. 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.

    More about this item

    Keywords

    School-to-work transitions; Permanent occupation; Continuous-time Markov Chains;

    JEL classification:

    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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