Work‐Related Training and the Probability of Transitioning from Non‐Permanent to Permanent Employment
| Author | Felix Leung,Mark Wooden,Ning Li,Duncan McVicar |
| DOI | http://doi.org/10.1111/bjir.12182 |
| Date | 01 September 2016 |
| Published date | 01 September 2016 |
British Journal of Industrial Relations doi: 10.1111/bjir.12182
54:3 September 2016 0007–1080 pp. 623–646
Work-Related Training and the
Probability of Transitioning from
Non-Permanent to Permanent
Employment
Duncan McVicar, Mark Wooden, Felix Leung
and Ning Li
Abstract
It is widely believed that work-related training increases a worker’s probability
of moving up the job-quality ladder. This is usually couched in terms of eects
on wages, but it has also been argued that training increases the probability
of moving from non-permanent forms of employment to more permanent
employment. This hypothesis is tested using nationally representative panel data
for Australia, a country where the incidence of non-permanent employment,
and especially casual employment, is high by international standards. While
a positive association between participation in work-related training and the
subsequent probability of moving from either casual or fixed-term contract
employment to permanent employment is observed among men, this is shown
to be driven not by a causal impact of training on transitions but by dierences
between those who do and do not receive training, that is selection bias.
1. Introduction
Non-standard, contingent forms of employment, and especially temporary
and casual employment — henceforth non-permanent employment — are
typically equated with poor job quality (e.g. Dekker and van der Veen 2015;
Kalleberg et al. 2000; McGovern et al. 2004; Neinh¨
user and Matiaske 2006).
Nevertheless, such jobs could still be welfare enhancing if they improve the
chances of workers finding more stable and secure employment in the future.
The evidence on this is mixed, with some research suggesting that temporary
Duncan McVicar is at Queen’s University Belfast, Mark Wooden and Ning Li are at the
University of Melbourne, and Felix Leung is at the Universityof Sydney.
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2016 John Wiley& Sons Ltd/London School of Economics. Published by John Wiley & Sons Ltd,
9600 Garsington Road,Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA 02148, USA.
624 British Journal of Industrial Relations
jobs (and other forms of non-standard employment) often serve as entry
ports into more permanent jobs (e.g. Booth et al. 2002; Buddelmeyer and
Wooden 2011; de Graaf-zijl et al. 2011; Gash 2008; Ichino et al. 2008; Segal
and Sullivan 1997), while others conclude that the rate of transition between
temporary and permanent jobs can be quite low (e.g. Amuedo-Dorantes
2000; G¨
uell and Petrongolo 2007), that the risk of experiencing recurrent
unemployment in the future is much higher among temporary job holders
(e.g. Mooi-Reci and Dekker 2015), and that in some situations, individuals
might be better o waiting for a better more securejob than accepting the first
non-permanent employment opportunity (e.g. Barbieri and Scherer 2009; Yu
2012).
Somewhatsurprisingly, this growing bodyof evidence tells us relatively little
about the type of working conditions that might be most supportive of, or
harmful to, progression from a less secure non-permanent job into a more
permanent job. Previous research typically controls for an extensive range
of individual characteristics (such as age, sex, educational attainment, work
experience and the like), but job characteristics, when considered, are usually
limited to industry, occupation, working hours, and in some cases firm size.
Only rarely has anyserious consideration been given to the potential role that
work-related training might play.
Identifying and quantifying the role that work-related training plays in
assisting workers progress from non-permanent to permanent forms of
employment is the aim of this study. More specifically, we use longitudinal
survey data, tracking members of a nationally representative sample of
households in Australia over the period 2003 to 2013, to test whether
participation in a structured formal training program as part of one’s
employment has any positiveinfluence on the likelihood of workers employed
on non-permanent employment contracts (defined here as either fixed-term or
casual employment) subsequently progressingto a more secure job providing
ongoing or ‘permanent’ employment.
A key, and novel, feature of our analysis is that we seek to address
the endogeneity of training participation due to non-random selection into
training by exploiting the longitudinal nature of the data to estimate a
multinomial logit model of transitions out of non-permanent employment
that includes individual-specific fixed eects. The resulting evidence suggests
that any positive association between participation in work-related training
and transitions out of non-permanent employment is driven not by a causal
impact of training on transitions but by selection bias.
2. Training and job quality
A basic assumption of human capital theory is that training increases worker
productivity. This may, in turn, lead to higher wages and/or improvements in
other aspects of job quality for the trained worker in the future, depending in
C
2016 John Wiley& SonsLtd/London School of Economics.
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