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Social Indicators Research

, Volume 147, Issue 1, pp 111–132 | Cite as

Temporary Employment Contracts and Household Income

  • Inga Laß
  • Mark WoodenEmail author
Article
  • 69 Downloads

Abstract

It is widely accepted that temporary jobs tend to be associated with low pay which, in turn, will have negative consequences for household income. Evidence in support of such claims, however, is relatively thin. This study seeks to fill this void. In particular, it is both the first study to examine the consequences of temporary employment for workers’ household income within a multivariate framework, and the first to quantify the relative importance of the different channels through which temporary employment affects income. Regression and decomposition analyses are applied to longitudinal survey data from Australia, a country where the incidence of temporary forms of employment, and especially casual work, is very high by Western standards. Contrary to expectations, employment on a fixed-term contract is associated with significantly higher household incomes than permanent workers. In contrast, workers in casual and temporary agency employment are indeed found to live in households with lower average incomes than permanent workers. The estimated size of the income penalty is about 11% for temporary agency workers and 20% for casual employees. These differentials, however, are not primarily the result of lower wages, but instead are mainly due to the fewer hours worked by these groups. In the case of casual workers, lower annual individual earnings are partly offset by higher incomes of other household members. This compensatory effect, while not small, is still insufficient in size to fully close the income gap to permanent workers.

Keywords

Casual work Decomposition analysis HILDA Survey Household income Temporary employment 

Notes

Acknowledgements

This paper uses confidentialised unit record file data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey. The HILDA Survey Project was initiated and is funded by the Australian Government Department of Social Services and is managed by the Melbourne Institute of Applied Economic and Social Research. This research was also supported under the Australian Research Council’s Discovery Projects funding scheme (Project # DP160103171).

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Copyright information

© Springer Nature B.V. 2019

Authors and Affiliations

  1. 1.Melbourne Institute of Applied Economic and Social ResearchUniversity of MelbourneMelbourneAustralia

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