Unemployed and then? The role of non-standard employment in labour market trajectories after unemployment

Abstract

Non-standard employment (NSE) might offer employment opportunities for unemployed workers, who would not find a job otherwise and can improve their human capital while working in NSE instead of being unemployed. NSE thus could serve as a bridge to regular, permanent employment. However, these stepping stone effects might not occur in a segmented labour market, when the accumulated human capital is not useful for regular jobs or NSE is not a positive signal to potential employers. Using German administrative data and sequence and cluster analysis, this article examined the labour market trajectories of initially unemployed individuals between 2012 and 2015 over a 4-year period with a focus on four common forms of NSE. The results indicate that NSE is not limited to marginal groups but 62% of the initially unemployed belong to a cluster with a substantial share of NSE. Furthermore, while most individuals stay in NSE, some regular full-time employment occurs after NSE.