Temporary Jobs: Stepping Stones or Dead Ends?

In Britain about 7% of male employees and 10% of female employees are in temporary jobs. In contrast to much of continental Europe - with stricter employment protection provisions - this proportion has been relatively stable over the 1990s. Using data from the British Household Panel Survey, and informed by relevant theory relating to probation, sorting and human capital investment, we find that temporary workers report lower levels of job satisfaction, receive less work-related training, and are less well-paid than their counterparts in permanent employment. However, there is some evidence that fixed-term contracts are a stepping stone to permanent work. Women (but not men) who start in fixed-term employment and move to permanent jobs fully catch up to those who start in permanent jobs.