Economic and Social consequences of temporary employment

PhD Thesis# 380
Dr. Marloes (M.) de Graaf-Zijl
Prof. dr. G.J. van den Berg en prof. dr. J. Hartog


The use of temporary employment contracts has increased dramatically in Western societies over the last few decades. A wide variety of contracts such as fixed-term contracts, temporary agency work or on-call contracts serve the purpose of providing flexibility to employers in a world where employment protection impedes smooth adjustment of the workforce. This study provides insights in the economic and social consequences for society. It contains a detailed overview of the literature and empirical analyses on the consequences for unemployed individuals, temporary workers and employers in the Netherlands. For the unemployed the effect of temporary jobs as stepping-stones towards regular employment is estimated using a multi-state duration model, showing that temporary jobs shorten the duration of unemployment, but do not increase the fraction of unemployed workers who have regular work within a few years after entry into unemployment. For temporary workers wages are compared to those of regular workers using propensity score matching techniques, revealing that the lower wage paid to temporary workers can be explained from uncertainty about their ability. The effect of temporary work on job satisfaction is determined, using panel data techniques. Job satisfaction is mainly determined by satisfaction with job content, which is reduced by temporary agency work and not by other types of temporary work. The attractiveness of temporary contracts for employers is estimated using conjoint analysis, showing that in general fixed-term contracts that are converted into regular contracts after the screening period are most attractive for employers, because they allow for investment in (firm specific) human capital while at the same time reducing firing costs. Other non-standard work arrangements are valued only in some situations, e.g. in highly volatile environments.

Publisher of the TI-theses is: Rozenberg Publishing Services