Temp work does not lead to full-time work

Companies that refer temporary workers ("temps") like to advertise that temporary work with few benefits is a stepping stone to full-time work with full benefits. Whether they can back this up beyond anecdotal evidence is another question, and it may depend very significantly on the labor market in question. Sectoral practices differ widely, and regulation about temp work in some countries makes it actually difficult to convert temp work to full-time work. In fact, some agencies even try to prevent this, as they would lose their commissions.

Joakim Hveem looks at Sweden and finds that work intermediated through temp agencies actually decreases the probability of subsequent full-time work, as if a stigma were attached. While this negative effect seems to be caused by immigrants, this results is still disturbing, in particular for women who often rely on temp work as a stepping stone to regular work (they could instead try with volunteering). The only good thing that comes out of this study is that temp work at least keeps people out of unemployment. Note, however, that the study is only about temp work intermediated through an agency. As mentioned above, these agencies may have perverse incentives. Self-intermediated temp work may fare better for later outcomes.