The role of fixed-term contracts at labour market entry in Poland: stepping stones, screening devices, traps or search subsidies?

Abstract

Poland has become an interesting outlier in Europe in terms of employment flexibility, with an extremely high incidence of fixed-term contracts, particularly at labour market entry. In this article, detailed retrospective data from the Polish School Leavers Survey are used to analyse the dynamics of entry and exit from fixed-term contracts. The results show that neither firm-based vocational training nor diplomas from more selective tertiary education institutions provide graduates better access to secure entry positions. Regarding exit dynamics, transition patterns from fixed-term contracts into unemployment suggest that the timing of exits often coincides with the date of becoming eligible to collect unemployment benefits. The results also imply that, in Poland, fixed-term contracts might serve employers by helping them to identify the best workers.

Taking lemons for a trial run: Does type of job exit affect the risk of entering fixed-term employment in Germany?

“…This property, they argue, enables circumvention of employment protection regulations, effectively rendering fixed-term contracts potential devices for screening workers after hire (Baranowska et al, 2011;Faccini, 2014;Portugal and Varejão, 2010). Used as prolonged probation periods, temporary contracts enable employers to collect first-hand information on worker performance, thus lowering their risk of permanently hiring unproductive workers (Wang and Weiss, 1998).…”

“…Fixedterm contracts may enable employers to screen newly hired employees for a prolonged period of time (Baranowska, Gebel and Kotowska, 2011;Faccini, 2014;Portugal and Varejão, 2010). The possibility of learning in detail about match quality before making a decision about long-term employment might lead to employment for workers who otherwise would not have received a job offer at all.…”

¿Es la precariedad igual para todos los trabajadores temporales? Diferencias y semejanzas entre clases sociales

“…Baranowska et al (2011) señalan que ni la formación profesional ni la educación terciaria aumentan la probabilidad de acceder a posiciones seguras en el mercado laboral polaco. Gebel (2010), con datos para Alemania y el Reino Unido, encuentra que la temporalidad tiene efectos heterogéneos en función de algunas variables sociodemográficas, tales como el género o la educación, por lo que enfatiza la necesidad de que análisis futuros se centren en las consecuencias de entrar en un trabajo temporal para subgrupos aún más diferenciados.…”

Making the Labour Market Work Better in Poland

“…Temporary employment is especially widespread for young workers (Figure 8, Panel D), and such a high incidence seems to lengthen school-to-stable-work pathways and make them more erratic (OECD, 2009). Fixed-term contracts seem to serve more as a screening device than a stepping stone to an open-ended job (Baranowska et al (2011); Panels E and F). More generally, labour-market dualism might make some specific groups, in particular the young and low-skilled workers, bear a disproportionate part of the costs of adjustment to economic shocks.…”

“…Such labour-market duality might be detrimental to economic performance, as it generates erratic pathways towards stable employment and may result in underinvestment in human capital. Temporary contracts do not seem to serve as a springboard to stable employment in Poland (OECD, 2009;Polakowski, 2012), but rather as a screening device (Baranowska et al, 2011). Reported estimated changes in the youth unemployment rate have been capped at 1.8 points to improve the readability of the graph, the true value being 2.4 for Spain (based on the output gap).…”