Survey analyses differences between precarious and atypical work

A survey by the Institute of Economic and Social Research measured the precarity of various atypical employment forms. Atypical workers face higher social risks than workers in standard employment, but the risks vary depending on the form of employment. In terms of employment stability, precarity is more widespread among permanent full-time workers than among permanent contingent and part-time workers.

Employment policies have led to a substantial increase in non-standard forms of employment in Germany. A survey by Wolfram Brehmer and Hartmut Seifert from the Institute of Economic and Social Research (Wirtschafts- und Sozialwissenschaftliches Institut, WSI) of the Hans Böckler Foundation (Hans-Böckler Stiftung) analysed the social risks of various forms of atypical work by measuring their dimensions of employment precarity.

About the survey

The WSI survey is based on 17 annual datasets covering the period 1989–2005 from the German Socio-Economic Panel (Sozio-oekonomische Panel, SOEP) which is a representative household panel survey in Germany. All workers aged between 18 and 65 years who have at least four years of schooling are included in the survey, as are all persons who lost their jobs within the period covered by the dataset. The data covers more than 21,000 persons who, on average, were surveyed over 5.3 years.

Variables

To examine the social risks of various forms of atypical employment, the survey analysis is based on the following two variables:

• standard employment status defined as a permanent full-time job liable to social security contributions;
• atypical employment, including: contingent work, otherwise known as temporary or casual work, which mainly comprise low-wage jobs that are not fully integrated in the social security systems; part-time work; fixed-term work; and temporary agency work; as well as all mixed forms of these employment contracts, such as fixed-term contingent work or fixed-term full-time work.

Indicators

The term ‘precarious work’ is not clearly defined by literature; however, it typically implies that workers face a higher risk of socioeconomic instability than workers in standard employment relationships. Mr Brehmer and Mr Seifert determined four dimensions of precarious work, along with their key indicators.

• Wage level – Indicator: low wage (gross hourly wage) according to the definition of the Organisation for Economic Co-operation and Development (OECD) which is two thirds of the median wage of full-time employees.
• Employment stability referring to the stability of employment relations and the likeliness of being employed – Indicator: job loss or job found within a year of job loss.
• Employability – Indicator: participation in vocational training within the last three years.
• Inclusion in social security system – This dimension was not included in the survey due to the database.

The multivariate correlation was measured by a panel-random effect regression.

Survey findings

Wage level

Workers in ‘atypical jobs’ are less likely to earn a wage above the low-wage level than employees in standard employment relationships. As most atypical workers are women, their risk of having a low-wage job is four times that of men.

Compared with workers in standard employment relationships, the low-wage risk is highest for fixed-term contingent workers – being 18 times higher – and lowest for permanent part-time workers – being three times higher. Permanent contingent workers, for whom the risk of being in low-wage jobs is 11.5 times higher, and temporary agency workers, for whom it is 7.5 times higher, range in the middle.

Nonetheless, several factors have a positive effect on the wage level of atypical workers, such as a large company size, employment in a particular industry sector, duration of schooling and of professional training, duration of employment and the workers’ age.

Employment stability

Employment stability was measured by monitoring who had lost their jobs in the preceding year and who found a new job within a year of job loss. Not surprisingly, it showed that temporary agency workers and persons on a fixed-term employment contract face the highest risk in terms of employment stability.

It should be noted, however, that full-time workers holding an open-ended employment contract face a higher risk of losing their jobs and subsequently finding new jobs than part-time workers with a permanent employment contract. Surprisingly, the employment stability of full-time workers in standard open-ended employment appears to be lower than that of permanent contingent workers.

No significant gender effect emerged regarding employment stability.

Employability and participation in vocational training

The opportunities for atypical workers to participate in vocational training are slightly inferior to those for employees in standard employment, but the differences between these two groups of workers are not very significant. However, a substantial difference regarding access to vocational training emerges between contingent part-time workers and all other atypical workers. This situation affects again mostly women.

Notes:

= higher risk of precarity compared with permanent full-time employees;

- = lower risk of precarity compared with permanent full-time employees.

Reference

Brehmer, W. and Seifert, H., Wie prekär sind atypische Beschäftigungsverhältnisse? Eine empirische Analyse, Paper given at the Institute for Economic Research Halle (Institut für Wirtschaftsforschung, IWH) and the Institute for Employment Research (Institut für Arbeitsmarkt- und Berufsforschung, IAB) ‘4th Workshop on labour market policies’ [4. IWH IAB Workshop zur Arbeitsmarktpolitik], Halle, 12–13 November 2007 (unpublished).

Birgit Beese, Institute of Economic and Social Research (WSI)