Conference Paper BHPS-2009 Conference: the 2009 British Household Panel Survey Research Conference, 9-11 July 2009, Colchester, UK
Early career consequences of temporary employment in Germany and the United Kingdom
There is an ongoing debate whether temporary contracts provide a “bridge” to the labour market or whether they lead to an “entrapment” in unstable job with bad career prospects. Drawing on comparable data from the British Household Panel Study (BHPS) and the German Socio-Economic Panel (GSOEP) from the period 1991-2007, I examine the potential negative scar effects of temporary employment at labour market entry on subsequent individual career chances. At the individual level, temporary employment consequences are assessed in a multidimensional evaluation using propensity score matching techniques in order to compare “statistical twins” with similar individual and job characteristics that differ only in their initial contract status. Particularly, I investigate wage dynamics, chances of finding a permanent job, skill investments as well as subsequent unemployment and inactivity risks. Such a broad look is accomplished by studying the outcomes at different points during the first five years of the employment career. Using longitudinal data allows following genuine individual career trajectories in such a dynamic lifecourse perspective. Furthermore, I test for gender and education-specific causal effect heterogeneity. The cross-country comparison between Germany and Great Britain should offer some insights on the mediating role of the institutional context. Due to the weaker educationjob linkages, the openness of the labour market and weaker unions in Great Britain, the bridge perspective should be more appropriate for the British case whereas the entrapment perspective with long lasting negative career effects of inferior temporary labour market entry positions seems more applicable in Germany. The empirical results confirm that a segmentation perspective describes best the German case with higher wages penalties and higher risks of repeated temporary employment cycles. An integration scenario works better in the UK where disadvantages are less pronounced and employment losses are mainly related to educational returners. Nevertheless, also in Germany all differences fade away after four years showing that the view of temporary jobs as permanent scars with long-lasting damaging career effects is inappropriate for both countries. Furthermore, I find gender and education-specific causal effect heterogeneity with stronger incidence of repeated temporary employment for young German men on the one hand and stronger wage penalties for young British women on the other hand. Across boarders, temporary contracts seem to be used more often as a screening device for tertiary graduates.