The effects of marginal employment on subsequent labour market outcomes

René Böheim and Andrea Weber

No 2006-12, Economics working papers from Department of Economics, Johannes Kepler University Linz, Austria

Abstract: We analyse the consequences of starting a wage subsidised job, "marginal employment", for unemployed workers. Marginal employment is a type of wage subsidy paid to unemployed workers and they do not lose their unemployment benefits if the wage is below a certain threshold. We ask if the unemployed who start marginal jobs face better labour market outcomes than those who do not work. A priori it is not clear if those who work in marginal employment improve their labour market status, e.g. by signalling effort, or worsen it by reduced job search effort. We select unemployed workers and investigate the effect of marginal employment on their labour market outcomes, by means of propensity score matching. Our results suggest that selection into marginal employment is "negative", i.e. workers with characteristics we usually associate with low-productivity are more likely to select into such jobs. The unemployed who start to work in marginal employment during their unemployment spell suffer a (causal) penalty for doing so, relative to their peers who do not. The penalty, in terms of less employment, more unemployment, lower wages, lessens over time but is still present after three years.

Keywords: marginal employment; atypical employment; labour supply; propensity score matching (search for similar items in EconPapers)
JEL-codes: J22 J64 (search for similar items in EconPapers)
Date: 2006-07
New Economics Papers: this item is included in nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Related works:
Journal Article: The Effects of Marginal Employment on Subsequent Labour Market Outcomes (2011)
Journal Article: The Effects of Marginal Employment on Subsequent Labour Market Outcomes (2011)
Working Paper: The Effects of Marginal Employment on Subsequent Labour Market Outcomes (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:jku:econwp:2006_12

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