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Is temporary employment a stepping stone for unemployed school leavers?

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  • C. GÖBEL
  • E. VERHOFSTADT

    ()

Abstract

Many school-leavers enter the labour market via temporary employment. In this paper we investigate the impact of a temporary employment spell at the start of the career on the transition rate into permanent employment. We compare the case of temporary employment to the hypothetical case of a direct transition from unemployment to permanent employment. In order to control for selective participation in temporary employment we include a large set of explanatory variables which have been especially collected to study school-leavers. We apply the AIC-information criterion to select the appropriate specification for unobserved heterogeneity. Based on the information criteria we conclude that given our data, there is no support for a model with selection in unobserved characteristics. Simulation exercises provide insights into the development of the effect of temporary employment over time. For a sample of unemployed Flemish school-leavers we find that in the short run temporary employment delays the school leaver’s transition to permanent employment. However, in the long run temporary employment acts as a stepping stone and decreases the duration until permanent employment.

Suggested Citation

  • C. Göbel & E. Verhofstadt, 2008. "Is temporary employment a stepping stone for unemployed school leavers?," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 08/542, Ghent University, Faculty of Economics and Business Administration.
  • Handle: RePEc:rug:rugwps:08/542
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    Cited by:

    1. Picchio, Matteo & Staffolani, Stefano, 2013. "Does Apprenticeship Improve Job Opportunities? A Regression Discontinuity Approach," IZA Discussion Papers 7719, Institute for the Study of Labor (IZA).
    2. Christoph Ehlert & Jochen Kluve & Sandra Schaffner, 2012. "Temporary work as an active labor market policy: Evaluating an innovative program for disadvantaged youths," Economics Bulletin, AccessEcon, vol. 32(2), pages 1765-1773.
    3. Jahn, Elke J. & Rosholm, Michael, 2010. "Looking beyond the bridge: How temporary agency employment affects labor market outcomes," IAB Discussion Paper 201009, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    4. Jochen Kluve & Christoph Ehlert & Sandra Schaffner, 2011. "Training + Temp Work = Stepping Stone? – Evaluating an Innovative Activation Program for Disadvantaged Youths," Ruhr Economic Papers 0249, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    5. repec:zbw:rwirep:0249 is not listed on IDEAS
    6. Jahn, Elke Jutta & Rosholm, Michael, 2015. "The Cyclicality of the Stepping Stone Effect of Temporary Agency Employment," Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113117, Verein für Socialpolitik / German Economic Association.
    7. Bachmann, Ronald & Beimann, Boris & Bredtmann, Julia & David, Peggy & Ehlert, Christoph & Kassenböhmer, Sonja & Schaffner, Sandra & Siemers, Lars, 2011. "Studies on flexicurity Lot 1: Study on various aspects of labour market performance using micro data from the European Union statistics on income and living conditions (EU-SILC). Contract No. VC/2010/," RWI Projektberichte, RWI - Leibniz-Institut für Wirtschaftsforschung, number 72620.
    8. Ehlert, Christoph R. & Kluve, Jochen & Schaffner, Sandra, 2012. "Temporary Work as an Active Labor Market Policy: Evaluating an Innovative Activation Program for Disadvantaged Youths," EconStor Open Access Articles, ZBW - German National Library of Economics, pages 1765-1773.
    9. 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.
    10. Ehlert, Christoph & Kluve, Jochen & Schaffner, Sandra, 2011. "Training + Temp Work = Stepping Stone? – Evaluating an Innovative Activation Program for Disadvantaged Youths," Ruhr Economic Papers 249, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    11. Niebuhr, Annekatrin & Buch, Tanja, 2013. "Wage effects of labor market entry via temporary work agency employment - evidence for German apprenticeship graduates," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79818, Verein für Socialpolitik / German Economic Association.
    12. Sachverständigenrat zur Begutachtung der Gesamtwirtschaftlichen Entwicklung (ed.), 2013. "Gegen eine rückwärtsgewandte Wirtschaftspolitik. Jahresgutachten 2013/14," Annual Economic Reports / Jahresgutachten, German Council of Economic Experts / Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung, volume 127, number 201314.
    13. Jahn, Elke J. & Rosholm, Michael, 2014. "Looking beyond the bridge: The effect of temporary agency employment on labor market outcomes," European Economic Review, Elsevier, vol. 65(C), pages 108-125.

    More about this item

    Keywords

    temporary employment; school leavers; labour market policy;

    JEL classification:

    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies

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