Contingent employment and labour market pathways: bridge or trap?

Presenter: Mark Wooden, University of Melbourne

Recent years have seen increased interest in the changing role played by temporary and casual forms of employment. But how concerned we should be about the incidence of these more precarious, contingent forms of employment depends on the extent to which they provide a bridge to more secure, ongoing employment in the future. Existing evidence on this issue is mixed. A characteristic of most previous studies is a focus on single transitions between different labour market states. But such an approach cannot accurately identify indirect pathways from contingent to permanent employment, and nor can it identify ‘trap’ pathways involving short spells in other states. It also fails to distinguish between those experiencing contingent employment as a ‘blip’ and those with longer spells. This paper employs a different approach involving sequence analysis, a statistical method used to cluster individual cases into discrete groups based on the similarity of ordered sequences of observations. Using longitudinal data from the HILDA Survey, a panel survey that has been tracking members of as large representative sample of households in Australia on an annual basis since 2001, evidence for the co-existence of pathways that correspond to ‘bridge’ and ‘trap’ characterisations of contingent employment is found. Further, in the case of casual employment (the most pervasive type of contingent employment in Australia) these two types of labour market pathways are roughly equally prevalent, although for some groups – in particular women, those with low educational attainment, and those with a disability – ‘traps’ are more likely than ‘bridges’.