Absence of Stepping-Stone Effect in Temporary Employment
RCTReview
Active labor market programs often aim to place unemployed workers into short-term or fixed-term positions under the assumption that early work experience serves as a stepping stone toward permanent employment. However, short-term contract placements may fail to build durable human capital or employer trust, leaving long-term employment trajectories unimproved.
Picture this
Think of getting a temporary trial pass to a gym that expires after a few months. While using the temporary pass gets a person onto the exercise floor immediately, it does not guarantee a permanent gym membership once the trial period ends. When the trial pass expires, the person is right back at square one looking for a way into the building.
What the evidence says
Short-term employment gains at eight months were driven entirely by job seekers finding fixed-term contracts with zero increase in permanent employment contracts, and all employment advantages vanished completely after twelve months.
- Who was studied
- Nearly 30,000 young, college-educated job seekers in France (mid-twenties, at least a two-year degree, unemployed for at least six months) across 235 communities.
- How
- Clustered randomized controlled trial tracking treated and comparison job seekers over a nearly two-year follow-up period (at 8, 12, and 20 months).
What to do
Evaluate job placement program success using permanent employment contract metrics rather than short-term or temporary placement rates.
From the source
"Increases in employment were also driven by job seekers who found fixed-term contracts, and there was no increase in permanent employment contracts. However, all employment gains disappeared after 12 months..."
briefcase_job-placement-and-displacement.pdf