IZA DP No. 11012: Temporary Employment Boom in Poland: A Job Quality vs. Quantity Trade-off?
Between 2002 and 2015, temporary employment in Poland more than doubled. Poland became the country with the highest share of temporary jobs in the EU. In this paper, we study how this process affected job quality and job quantity. We analyse the gaps between temporary and permanent workers in six dimensions of jobs quality, adopting measures proposed by the OECD and Eurofound. Of these gaps, the differences in earnings quality, job security, and work scheduling quality were the most pronounced. Job quality has improved for both groups of workers, but the gaps have not closed completely. Firms in Poland prefer to employ temporary rather than permanent workers because of the lower firing costs, tax wedges, and wages associated with temporary contracts. We use a stylised labour demand model to quantify the upper bound of a potential job creation effect due to lower labour costs incurred through the use of temporary contracts. We find that this effect did not exceed 4% of dependent employment in 2015. We cannot rule out the possibility that the net employment effect was zero. Our findings show that even if the availability of less-costly temporary contracts caused some additional jobs to be created, temporary workers suffered from lower job quality in several dimensions.