Temporary Jobs in Sweden: Incidence, Exit, and On-the-Job Training

Abstract: This thesis analyses different aspects of temporary jobs in the Swedish labour market during 1991-1999. Throughout the thesis we put special focus on differences between the genders, and differences between native-born and foreign-born workers. In chapter 1, An Introduction to Temporary Jobs in Sweden, we describe the evolution of different types of temporary jobs in Sweden during the 1990s, we review the legal framework for such jobs, we compare the Swedish experience of temporary jobs with other countries, and we also discuss welfare aspects of temporary jobs. In chapter 2, The Incidence of Temporary Jobs in Sweden. Towards a New Form of Labour Market Segmentation?, we analyse the determinants of the incidence of different types of temporary jobs in Sweden. In the theoretical section we take the employment contract as a starting point and discuss how different individual and job characteristics might affect a firm’s offer probability of temporary jobs respectively an employee’s acceptance probability of temporary jobs. We do not find any evidence of a systematic difference between the genders, but such evidence is found between Swedish-born and foreign-born workers. Young individuals have a higher probability of holding temporary jobs, and so have individuals who work part-time. Finally, our results indicate a negative structural shift in temporary jobs during the 1990s, towards a permanently higher level of such jobs. In chapter 3, Transitions From Temporary Jobs to Open-Ended Jobs in the Swedish Labour Market, we analyse the probability of exiting from temporary jobs to open-ended jobs. Our empirical results show that temporary jobs are, in general, rather poor stepping-stones to open-ended jobs in Sweden. The only type of temporary job that is shown to have this function is probation jobs. Swedish-born males who hold temporary jobs have a higher probability of exiting to open-ended jobs than other demographic groups (females and foreign-born workers). Other characteristics that influence the exit probabilities from different types of temporary jobs are, for example, age, socio-economic status, type of labour market sector, and part-time work. Chapter 4, Temporary Jobs and On-the-Job Training in Sweden -Is There a Trade-Off?, analyses the nexus between different types of temporary jobs and on-the-job training (OJT) in Sweden. According to the standard human capital theory, the prospect for temporary jobholders to receive OJT should be very low. However, models that take into account that the labour market is characterized by imperfect information might explain that also temporary jobholders receive OJT. The empirical results show that the probability of receiving OJT is much lower for temporary jobholders, and even more so for workers born outside Sweden. We do not find any evidence of gender differences. Regarding the amount of OJT received (given that a person receives OJT) the results show that male temporary jobholders receive more OJT than females, and that foreign-born temporary workers receive more OJT than comparable Swedish-born workers. It is also the case that holding a temporary job not necessarily implies fewer days of OJT than holding an open-ended job.