Labour Markets in Transition
Edited by Ruud Muffels
Chapter 4: Dreaming of a Permanent Job: The Transitions of Temporary Workers in Italy and Spain
Virginia Hernanz, Federica Origo, Manuela Samek Lodovici and Luis Toharia 4.1 INTRODUCTION Recent decades have witnessed a significant increase in the flexibility of most European labour markets. In this context, external flexibility has mainly been exercised through the use of temporary or fixed-term1 employment contracts (OECD, 1999). In 2003, almost 13 per cent of all employees in the EU was employed in flexible contracts, ranging from 6 per cent in the UK to more than 30 per cent in Spain, with the figure for Italy being just below 10 per cent (European Commission, 2004). Public support for temporary employment schemes has been driven by their potential for increasing employability and lowering the risk of long-term unemployment. Temporary work should in fact help the unemployed to regain employment and preserve or improve their human capital through work experience, thus reducing the number and duration of unemployment spells that individuals experience while enhancing their probability of finding better (permanent) jobs. Empirical evidence also seems to suggest that employers may use temporary contracts as a way to select and screen future permanent employees (Storrie, 2002; Houseman and Osawa, 2003). However, it has been argued that the positive effects of temporary employment systems may be offset by costs related to the poor quality of temporary jobs and the limited career opportunities of temporary workers. As far as temporary jobs are characterised by lower wages and impaired working conditions, they signal the consequences of dual labour markets arising from the expansion of temporary work (Lindbeck...
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