Fixed‐Term Contracts: Short‐Term Blessings or Long‐Term Scars? Empirical Findings from theNetherlands 1980–2000

Abstract

Using a comprehensive longitudinal dataset of prime-age Dutch workers over the period 1980-2000, we examine how a previously held job with a fixed-term contract influences both the likelihood and the duration of a future spell of unemployment. Analyses show that Dutch workers with fixed-term contracts experience higher risks of future unemployment and have no shorter spells of unemployment compared to workers with regular contracts. Results also reveal that swifter employment re-entries among men with fixed-term contracts can be explained by their job search efforts before unemployment. Our study (partly) invalidates theoretical positions that claim that fixed-term contracts foster employment security by shortening unemployment durations; suggesting that fixed-term contracts are a short-term blessing that could end, for some workers, in a recurrent unemployment trap.

Temporary Employment and the Future Labor Market Status

“…For men, these type of contracts work as a stepping-stone toward establishment on the labor market to a greater degree than for women. Mooi-Reci and Dekker (2015), in a longitudinal study, compared the risk of becoming unemployed between temporary and permanent employees in the Netherlands. They show that those who have previously been temporary employed have recurring periods of unemployment to a greater extent.…”

A multichannel typology of temporary employment careers in the Netherlands: Identifying traps and stepping stones in terms of employment and income security

“…This introduces a twofold problem. First, as temporary employment may have a scarring effect, the career path of a worker is likely to influence a worker's probability to make the transition to a good labour market outcome as well as the duration until that transition takes place (Hopp et al, 2016;Mooi-Reci and Dekker, 2015;Pavlopoulos, 2013;Scherer, 2004). Second, a transition to permanent employment does not have to be a final outcome in the worker's career.…”

Positive and negative implications entailed by fixed-term employment contracts

“…These surveys have revealed that the labor market is divided, between the workers with permanent, steady jobs (the so-called insiders) and those with a fixed-term employment contract (the outsiders). According to this insider/outsider pattern, the former have stable, well-paid employment and a high level of social protection and security, while the fixed-term workers hold a significant part of secondary economy, which provides unstable, unprotected jobs with low social rights and benefits; moreover, they can be easily dismissed in the event of economic crises (Mooi-Reci & Dekker, 2015). It has been found that these circumstances defining the "outsiders'" sphere entail higher risks of unemployment in the future for these workers.…”

“…It has been found that these circumstances defining the "outsiders'" sphere entail higher risks of unemployment in the future for these workers. Indeed, on the one hand the jobs taken by fixed-term workers are less skilled and easier to find, thus generating shorter unemployment periods; but on the other hand, these jobs are also more easily lost and consequently increase the risk of unemployment for the future (Mooi-Reci & Dekker, 2015). This is why the fixed-term employment contracts are associated with great potential precarity, expressed as follows: a) Regarding the job instability and the protection granted to the employees on a fixed-term employment contract.…”

“…The employee's vulnerabilities, generated by this type of employment, also have consequences on the hiring and working conditions. In the context of our analysis, we mention the empirical data recorded by specialized literature (Mooi-Reci & Dekker, 2015;Cutuli & Guetto, 2013), revealing a major discrepancy between the employers' investments in the professional development and training of temporary workers versus permanent workers. This fact is seen as strongly influenced by the cost-benefit ratio from the standpoint of the employer.…”