Is temporary employment an answer to unemployment?
Mojca Svetek | 14 November 2023
It is well-known that the long-term unemployed have more difficulty finding a job than the short-term unemployed. In the same vein, research is clear that temporary jobs shorten the duration of unemployment. This is why temporary employment has been promoted as a solution for the long-term unemployed. Indeed, it appears that temporary employment could help the unemployed to regain employment and in some cases transition into more stable and more high-quality employment. However, in many cases a single temporary job will not lead to a permanent employment but rather to a series of temporary jobs. Now, a series of temporary jobs is not necessarily a solution to unemployment we would like to see.
The thing is that a sequence of temporary contracts usually also includes periods of unemployment. Repeated transitions from employment to unemployment, as well as prolonged temporary employment, lead to increasingly poorer outcomes for mental and physical health.
Research data on life satisfaction before, during, and after unemployment shows a clear picture: people are profoundly scarred by the experience of unemployment. The immediate impact of unemployment on life satisfaction is severe. However, although individuals do recover and their life satisfaction does improve over the next few years, they never fully bounce back. In fact, long-term studies demonstrate that the negative effects of the unemployment experience can endure for more than 20 years.
The unemployment experience can also impact job search behaviours. Some groups of unemployed experience job search fatigue and become disillusioned. These people then lack the motivation and persistence to pursue high-quality jobs. This further increases the odds that the vulnerable will become entrapped, cycling between bad jobs and unemployment or risk long-term unemployment.
Therefore, one of the challenges policy makers and policy implementers face is how to support vulnerable groups in finding suitable employment that is permanent or allows transition into permanent employment. From what we know at the moment, these interventions require psychological support and support for continued job search after temporary employment.
Research articles:
de Graaf-Zijl, M., van den Berg, G. J., & Heyma, A. (2011). Stepping stones for the unemployed: the effect of temporary jobs on the duration until (regular) work. Journal of Population Economics, 24(1), 107-139.
Dengler, K., Hohmeyer, K., & Zabel, C. (2021). Welfare recipients’ transition into employment and employment stability in Germany. Labour, 35(4), 450-484.
Gagliarducci, S. (2005). The dynamics of repeated temporary jobs. Labour Economics, 12(4), 429-448.
Galić, Z., & Šverko, B. (2008). Effects of prolonged unemployment and reemployment on psychological and physical health. Review of Psychology, 15(1-2), 3-10.
Halleröd, B., Ekbrand, H., & Bengtsson, M. (2015). In-work poverty and labour market trajectories: Poverty risks among the working population in 22 European countries. Journal of European Social Policy, 25(5), 473-488.
Lim, V. K., Chen, D., Aw, S. S., & Tan, M. (2016). Unemployed and exhausted? Job-search fatigue and reemployment quality. Journal of Vocational Behavior, 92, 68-78.
Lucas, R. E., Clark, A. E., Georgellis, Y., & Diener, E. (2004). Unemployment alters the set point for life satisfaction. Psychological science, 15(1), 8-13.
Pirani, E., & Salvini, S. (2015). Is temporary employment damaging to health? A longitudinal study on Italian workers. Social science & medicine, 124, 121-131.
Richter, E. P., Brähler, E., Stöbel-Richter, Y., Zenger, M., & Berth, H. (2020). The long-lasting impact of unemployment on life satisfaction: results of a longitudinal study over 20 years in East Germany. Health and Quality of Life Outcomes, 18(1), 1-7.
Svalund, J., & Berglund, T. (2018). Fixed-term employment in Norway and Sweden: A pathway to labour market marginalization? European Journal of Industrial Relations, 24(3), 261-277.