Are temporary jobs in the UK ‘dead end’ jobs with poor pay and prospects or ‘stepping
stones’ to permanent employment in good jobs? New research by Alison Booth,
Marco Francesconi and Jeff Frank, published in the latest issue of the Economic
Journal, confirms the popular – but hitherto unsubstantiated – perception that
temporary jobs are generally not desirable compared to permanent employment.
The study reveals that temporary workers have lower levels of job satisfaction, receive
less training and are less well paid than their counterparts in permanent employment.
Nevertheless, there is some evidence that fixed-term contracts are stepping stones to
permanent work. What’s more, women who start in fixed-term employment and move to
permanent jobs fully catch up to the wage level of those who start in permanent jobs.
In the UK, approximately 7% of male employees and 10% of female employees are in
temporary jobs. The researchers use data from the British Household Panel Survey, a
nationally representative random sample of 5,500 private households in Britain that
have been interviewed annually since autumn of 1991. Analysis of nearly 1,750 men
and nearly 2,000 women shows that:
?? Temporary employment is more common for workers who are less experienced, in
the public sector and in part-time jobs. A significant fraction of women in
professional occupations and higher qualifications is more likely to be on fixed-term
contracts.
?? Temporary workers report lower levels of job satisfaction (especially in terms of
promotion prospects and security) and receive less work-related training.
?? There are essentially two types of temporary work: seasonal/casual jobs and fixedterm
contracts. Both types of employment pay significantly less compared to
permanent employment.
?? There is some evidence that fixed-term contracts are a stepping stone to permanent
work.
?? Women (and to a lesser extent men) who start in fixed-term employment and move
to permanent full-time jobs fully catch up (within 5-10 years) with those who start in
permanent jobs.
Overall, these results are consistent with theories of temporary work. Particularly, in
seasonal/casual jobs (where there is little possibility of moving to a permanent job),
there will be little training. Wages and job satisfaction will be low.
For fixed-term temporary jobs, there is greater potential for moving into permanent jobs.
There is evidence for this in the study. Fixed-term temporary jobs may well be stepping
stones to a future career, although men who begin in jobs with fixed-term contracts
suffer a permanent earnings loss compared to men who begin their careers in
permanent jobs. This is consistent with the idea that these men are less able than those
who immediately acquire a permanent job on entering the workforce.
In contrast, women who start with fixed-term contracts fully catch up with those who
began on permanent contracts. This is consistent with a view that some women, on
entering the labour force, may take longer to decide on their career choices. Under this
hypothesis, women who begin in temporary work are as able as those who begin in
permanent jobs, and these women eventually make up for the lack of specific human
capital acquisition during the period of temporary work.
The important policy conclusion from this research is that expansion of temporary work,
as a way of increasing labour market flexibility, comes at a cost. But the cost may be
transitory and workers can effectively use fixed-term jobs (and, to a lesser extent,
seasonal/casual jobs) as stepping stones to permanent work.
ENDS
Notes for Editors: ‘Temporary Jobs: Stepping Stones or Dead Ends?’ by Alison Booth,
Marco Francesconi and Jeff Frank is published in the June 2002 issue of the Economic
Journal as part of a symposium on temporary work.
Booth and Francesconi are at the Institute for Social and Economic Research at the
University of Essex; Frank is Royal Holloway College, London.
The research was supported by the Economic and Social Research Council (ESRC)
under its programme on The Future of Work.
For Further Information: contact RES Media Consultant Romesh Vaitilingam on 0117-
983-9770 or 07768-661095 (email: romesh@compuserve.com); or Marco Francesconi
on 01206-873534 (mfranc@essex.ac.uk).