The Social Consequences of Temporary Employment and Unemployment in Europe

Research question/goal: 

Temporary employment has been propagated as an instrument of labour market flexibilisation to reintegrate unemployed workers. While a large body of literature shows that temporary contracts are inferior to permanent ones, there are almost no studies investigating the social consequences of temporary employment in comparison to unemployment. Against this background the central research questions of this project was what the causal effects of unemployment and temporary employment are on processes of social exclusion in terms of labour market career chances, poverty risks and psychological and physical health.

The empirical analyses were based on national panel data from selected European countries. Advanced techniques of modern causal analysis were applied in order to address problems of endogeneity and selection based on unobserved heterogeneity. The social consequences of temporary employment and unemployment were measured on multiple dimensions of social exclusion in order to detect potential trade-offs or cumulative risks and to get a broader social perspective.

Results of this project were published in 5 SSCI-listed journal articles, 1 discussion paper and they were presented at 17 national and international conferences. For example, in terms of labour market career consequences, it was shown in a comparative panel data analysis that German and British unemployed workers, who take up a temporary job have higher employment chances, higher chances of getting a permanent jobs, and higher wages in the long-term. Inversely, there is no support for the integration perspective in Switzerland. Regarding poverty risks it was found based on German panel data that unemployment causes increased poverty risks but that poverty risks did not increase after the Hartz Reforms. Regarding health consequences, panel data analysis for Germany reveal that unemployment has substantial effects on psychological health but does not alter physical health. Compared to temporary employment, unemployment is still the greater threat to individuals’ health.

Fact sheet

2011 to 2014
Data Sources: 
EULFS, EU-SILC and national household panel surveys (e.g. SOEP, BHPS/Understanding Societies, SHP)
Geographic Space: 
Western and Eastern Europe