Is a temporary Job Better than Unemployment? This is the question tackled by this newly published paper by DIW Berlin.
Using British, German, and Swiss panel data for the period of 1991–2009 this paper analyses the integrative power of taking up a temporary job for unempl oyed workers aged 15-54 as compared to the situation of remaining unemployed and searching for another job. It finds that taking up a temporary job increases the employment chances during the subsequent five years in (West and East) Germany and the UK. Moreover, the chances of having a permanent contract remain higher and a persistent wage premium can be found during the subsequent five years of the career.
Advantages of taking up a temporary job are slightly stronger in West Germany compared to East Germany, where temporary contracts are often based on public job creation measures with limited integration potential. Neither long-run advantages nor disadvantages of taking up a temporary job could be found in the case of the flexible Swiss labour market.
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