The welfare consequences of atypical employment depend crucially on its impact both on
the labour market as a whole and at the individual level. We therefore examine the following
research questions: (1) How has labour-market participation evolved over the life cycle in
recent decades? (2) What is the role of atypical employment, that is, to what extent do workers
pursue atypical employment over the course of their working lives and how have the
corresponding employment profiles by age changed over time? (3) Which types of
employment trajectories can be identified at the individual level?
The answer to the first question is the backbone for the following analyses. The
importance of atypical employment in recent times can only be assessed if it is clear how the
labour force participation developed over the life cycle when atypical employment played a
smaller role than it does nowadays. Hence, our main empirical approach is to provide
descriptive evidence on the life-cycle profile of different birth cohorts in this context (see also
Section 2). This approach does not allow us to establish a counterfactual situation in the sense
of a causal analysis, and we thus cannot interpret it in the sense of a causal cohort effect.
However, we are able to provide an encompassing portrait for different birth cohorts, which
also makes it possible to make a comparison with the current situation.
The answerto the second question illustratesthe importanceof atypical employment for the
labour market as a whole, and which subgroups of the population (by age and gender) are
affected most. Combined with the first researchquestion, we can relate general labour-market
participationto atypical employment,both over the lifecycle and over time. Thisis particularly
important for understanding the strong increasein female participation over time.
To answer the thirdquestion, we focus on individual employment trajectories and typical
sequences of different employment forms (regular employment, atypical employment,
unemployment, etc.) over the life cycle. Since periods of employment may have long-term
effects on an individual’s future employment trajectory, individual trajectories may deviate
greatly from average behaviour. Atypical employment may therefore only be concentrated
amongst certain groups of workers. We analyse these heterogeneities by depicting typical
employmenttrajectories. This also allowsus to make statementsabout the role and motives of
atypical employment at specific points in individuals’employment histories. Atypical
employment may, for example, facilitate access to the labour market at the first entry into
the labour market or after career breaks, be a stepping stone to regular employment or
representthe beginning of a permanentperiod of such employment.Which mechanism applies
is controversially discussed in the literature and dependson the type of atypical employment.
According to the Bundesagentur f€
ur Arbeit (2013), temporary agency work facilitates the
accessto the labour market for unemployedindividuals. However, likefixed-term employment,
it is associatedwith lock-in effects(Kv asnicka, 2009;Brehmer and Seifert,2008). Similar lock-in
effects areobserved in part-time employmentand marginal employment (Brehmerand Seifert,
2008), althoughthis is largely at the request of employees in order to better combine personal
and family obligations with work or to gradually retire (RWI, 2013;Wolf, 2010).
Our analyses provide important implications for economic policy. For example, if
involvement in atypical types of employment at early career stages is accompanied by a
significantly reduced probability of ever achieving a stable full-time employment
relationship, regulating atypical employment more strictly will be justified. Considering
distributional aspects, if the increase in atypical employment is concentrated on relatively
few people throughout their whole working lives, an economic policy response may be
warranted. This will not be the case if the increase is due to short periods of atypical
employment for relatively many people.
We use a data set that links the survey data of the National Educational Panel Study
(NEPS) with administrative data (see Section 2) to answer the research questions. This allows
us to study employment over the life cycle of individual workers. Hence, we can illustrate time
spent in atypical employment throughout labour-market careers. Furthermore, we observe a