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Employment Quality: Are There Differences by Types of Contract?

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Abstract

The aim of this article is to build and measure an employment quality index that meets four conditions: it is simple and understandable; it enables measurement over a long time period; it can be updated on an annual basis; it is comparable between groups of workers. Our index is quantified for different workers depending on the type of contract they have. In particular, we distinguish between those who hold an open-ended contract, those with temporary contracts hired directly by companies and those working through a temporary help agency. Furthermore, the index is measured on a ‘gross’ and a ‘net’ basis, i.e. taking into account the potential “composition effect”. Data from the Spanish and Italian Labour Force Survey are used to carry out the measurement. Our findings show that job quality remained fairly stable during the period of analysis (2006–2014), with a slight increase at the beginning and a minor decrease later on, and workers holding an open-ended contract fared the best and those with temporary contracts hired directly by companies fared the worst.

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Fig. 1

Source: Spanish and Italian LFS

Fig. 2

Source: Spanish and Italian LFS

Fig. 3

Source: Spanish and Italian LFS

Fig. 4

Source: Spanish and Italian LFS

Fig. 5

Source: Spanish and Italian LFS

Fig. 6

Source: Spanish and Italian LFS

Fig. 7

Source: Spanish and Italian LFS

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Notes

  1. For instance, the balance between work and personal life is a property of the relationship between the job and the individual who holds it. The extent to which a job satisfies the need for a good balance between work and personal life will depend on the characteristics of the job (e.g. flexible working time) and aspects of the personal life of the worker (e.g. family responsibilities).

  2. The concept of “decent work” developed by the ILO represents rather the expression of a policy objective than something really operative, although some authors linked to the ILO have developed some indices and sets of indicators based on that concept (Ghai, 2003; Bonnet et al., 2003; Anker et al., 2003; Bescond et al., 2003).

  3. The European Trade Union Institute for Research, Education and Health and Safety (ETUI-REHS) is the research body of the European Trade Union Congress (ETUC), the most important representative body of workers at the EU level and therefore itself a major player in the EU policy area concerning work and employment. Its objective was to create an European job quality index and measure it yearly to examine changes over time and compare it across countries at any given point in time (Leschke et al. 2008). Results with data for 2005–2006 and 2010, respectively, are provided in Leschke and Watt (2008) and Leschke et al. (2012).

  4. The European Foundation for the Improvement of Living and Working (Eurofound) is an agency of the EU the mandate of which is to contribute to increasing knowledge on living and working conditions in Europe to help design better policies. Eurofound is in charge of the financing, design and coordination of the European Working Conditions Survey (EWCS). Eurofound has developed indicators to measure job quality using this survey (see Eurofound 2002, 2012).

  5. Other individual proposals aimed at international comparison are those by Tilly (1996), Ritter and Anker (2002), Sehnbruch (2004), Tangian (2005), Gallie (2007) and Royuela et al. (2009).

  6. The LFS does not contain questions on issues such as autonomy, intensity, social and physical environment, etc. However, the ‘ad hoc’ modulus on accidents (carried out in 1999, 2003 and 2013) could be used to construct indicators related to safety at work (see Hernanz and Toharia 2006). Furthermore, data on wages are not available for one of the covered countries (Italy) and very limited (only the wage decile to which the worker belongs is provided) for the other (Spain).

  7. Regarding the aggregation of the variables into dimensions and of the dimensions eventually into an aggregate index, the majority of proposals use equal weights and only a few different weights. This issue is one of the most controversial due to the value judgements implied and since no appropriate theoretical guide exists. In this regard, we have performed a sensitivity analysis of the results, applying a different set of weights to the dimensions and sub-components. In particular, the three dimensions have been assigned equal weights (33.3%), implying that the sub-components of each dimension have different weights. Results (available to the readers upon request) hardly change from those provided below: the evolution of the EQI remains the same, although minor changes of the levels are observed for the groups of direct temporary workers and THA workers, with reduced differences between them.

  8. See, for instance, Oi and Idson (1999), Abowd et al. (1999) and Lallemand et al. (2007). The wage data of the Spanish LFS confirms this idea. Using information for 2009, for instance, data show that 64.9% of workers in firms with 50 or more employees belong to the upper deciles (7th–10th), while this share is only 29.5% for workers in firms with less than 50 employees.

  9. The so-called ‘job analysis’ procedure has been carried out, so that the required qualification is determined using a systematic classification by means of establishing the theoretically required formal level of qualification for each occupation. Seven levels of qualification have been taken into account: ‘NF’ (No formal qualification, primary or lower secondary education), ‘SEC’ (Upper secondary general education), ‘VET-Low’ (Vocational Training: Basic level), ‘VET-Int’ (Vocational Training: Intermediate level), ‘VET-Adv’ (Vocational Training: Advanced level), ‘TERC-s’ (University education: Short-cycle) and ‘TERC-l’ (University education: Bachelor, Master or Doctorate).

  10. It may be surprising that working fewer than 20 h is considered the most desirable outcome of this sub-component of the EQI. However, it should be noted that this is only an indicator within an aggregate index that includes many other measures of job quality. If part-time workers have worse working conditions, this will be taken up by other indicators. Each attribute has to be evaluated independently and working fewer hours is better than working longer hours, keeping other factors constant, because it allows the individual to balance professional life and personal and family life in a more appropriate way.

  11. The result on WC4 approximates quite accurately what happens with labour earnings, since wage rates of THA workers seem to be above those of the direct temporary workers (see Arranz et al. 2016).

  12. The results of García et al. (2016) show a worsening of job quality between 2006 and 2010 when the analysis focuses on recently-created jobs, defined as those occupied by workers with tenure in the current firm lower than two years.

  13. For instance, García-Serrano (2004), using the Spanish Working Conditions Survey, finds that temporary workers with short job tenure seem to occupy jobs with poorer working conditions, but differences between permanent and temporary workers with longer tenure are less marked. This might suggest that temporary workers occupy not only entry-level jobs but also other jobs which are similar to those occupied by workers with permanent contracts. In other words, firms would be using temporary contracts as a way of lowering production costs, hiring workers on a temporary basis in order to perform permanent activities. Moreover, it is also known that temporary workers have less access to training and their wages are lower than their permanent counterparts, even after taking account of personal and job characteristics (OECD 2002; Davia and Hernanz 2004; Albert et al. 2005).

  14. Such as better wage rates (Arranz et al. 2016) and less work accidents (García-Serrano et al. 2010).

  15. This agrees with Leschke et al. (2012), who find that job quality declined for the EU-15 and the EU-27 on average and for half of the European countries (more intensely for Ireland, France, the UK and Sweden) when comparing 2005/2006 with 2010. Furthermore, their analysis of the correlation between the change in the unemployment rate in 2005–2010 and the change in the overall index confirms that those countries which have seen stronger falls (or weaker increases) in the unemployment rate have been those in which measured job quality has improved more (or declined less).

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Acknowledgements

The authors gratefully acknowledge financial support from the Spanish Association of Temporary Help Agencies (Asociación de Empresas de Trabajo Temporal, ASEMPLEO), for which a study on job quality was carried out. This article is based partially on that study. Thanks are extended to the editor of the journal and three reviewers, to seminar and conference participants, and to professor Kant A. Manyanas. Obviously, the opinions and analyses are the sole responsibility of the authors and not those of ASEMPLEO. The usual disclaimer applies.

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Authors and Affiliations

  1. Universidad de Alcalá, Alcalá de Henares, Spain

    José María Arranz, Carlos García-Serrano & Virginia Hernanz

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  1. José María Arranz
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  2. Carlos García-Serrano
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  3. Virginia Hernanz
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Correspondence to Carlos García-Serrano.

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Arranz, J.M., García-Serrano, C. & Hernanz, V. Employment Quality: Are There Differences by Types of Contract?. Soc Indic Res 137, 203–230 (2018). https://doi.org/10.1007/s11205-017-1586-4

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