3. The incidence of temporary work

How common is temporary employment in the labour market? How common is it for different labour force groups and in different sectors of the labour market? Section 3.1 describes the frequency of temporary work in the economy as a whole. Section 3.2 describes the incidence patterns that exist for different demographic groups and in different types of firm, industry and occupation. In Section 3.3, regression methods are used to explore the association between particular worker characteristics and the likelihood of being employed in a temporary job.

3.1 How common is temporary work?

Approximately one in ten employees (9.4 percent) were working in temporary jobs in the March 2008 quarter.^[3] This overall proportion is close to the proportion that was estimated in a previous non-official survey (Brosnan and Walsh, 1996).^[4]

Figure 1: Percent of employees in different types of temporary employment

Data table for Figure 1

In 2002 the OECD compiled cross-country data on the percentages of employees who were employed in temporary jobs in 2000.^[5] In most OECD countries, the percentage of employees who were in temporary jobs fell in the 5-15 percent range. The SoWL estimate puts New Zealand roughly in the middle of the OECD distribution, assuming that the distribution has not changed substantially since the early years of this decade. The OECD study found that temporary employment had become more common between 1985 and 2000 in some countries, but this was not a general trend.

More than half of those working in temporary jobs in the March 2008 quarter were classified as casual workers (see table 1). Casual workers made up 4.9 percent of all employees. The remaining temporary employees were classified as fixed-term workers (2.3 percent of all employees), temporary employment agency workers (0.7 percent), or seasonal workers not further defined (1.3 percent). A small percentage of jobs were temporary but could not be classified by type (0.2 percent).

Table 1: The incidence of temporary work by personal characteristics

All employees were asked a question on whether their job was seasonal, allowing seasonal workers to be separately identified. Just under 3 percent (2.7 percent) of all employees (representing 28 percent of all temporary employees), were identified as being seasonal workers. Note that the seasonal/non-seasonal classification overlaps the 'type of temporary employment relationship' classification. Therefore, seasonal workers can also be classified as casual, fixed term, or temporary employment agency workers, or having an employment relationship that is not further defined.

3.2 Who is most likely to work in a temporary job?

Incidence patterns by worker characteristics

Variations in the incidence of temporary work across population and labour force groups are shown in table 1. The first four columns of the table give results for the temporary workers who were in each type of employment relationship (casual, fixed-term, temporary employment agency, or seasonal not further defined). The fifth column, labelled 'all seasonal', gives results for all employees who indicated that their job was seasonal. The final column gives results for all temporary employees. Each figure in the table represents the percentage of employees in a particular population group (given by the row labels) whose main job was classified to a particular job type (given by the column labels). For instance, the first number in the first column (4.9 percent) represents the number of people who worked in casual jobs as a percentage of all employees. The figure immediately below it (4.3 percent) represents the number of male employees who were employed in casual jobs as a percentage of all male employees (or in other words, the incidence of casual work among male employees).

We begin by focusing on the results shown in the final column of table 1, which give the incidence of all forms of temporary employment for different population groups. Youth employees (aged 15-24 years), and employees aged 65 years and over, were much more likely to be working in temporary jobs in the March 2008 quarter than prime-aged adults. Seventeen percent of both youth employees and employees the '65 plus' age group were in temporary jobs, compared with just 7-8 percent of prime-aged employees. The relatively high incidence rate for young employees suggests that temporary jobs may serve as entry ports into the world of work. The relatively high incidence rate among adults aged 65 years and over suggests that temporary work may be used to extend employment in the final stages of the working life.

Females were more likely than males to be working in temporary jobs: their overall incidence rate was approximately 11 percent, compared with 8 percent for men. Although temporary work incidence rates are similar for men and women in the 'youth' and '55 plus' age groups, they diverge substantially in the intervening years. Prime-aged female employees were about twice as likely to be in temporary work as prime-aged male employees (10 percent compared with 5 percent). Detailed analysis of the incidence rates by five year age group indicates that the gender gap in the likelihood of working in a temporary job was largest in the 35-39 and 40-44 year age groups, where 3-4 percent of male employees and 10-11 percent of female employees were in temporary jobs.

Figure 2: Temporary work rates by gender and age group

Data table for Figure 2

Maori employees were more slightly likely to be working in temporary jobs than workers of other ethnic groups. The incidence of temporary work was also slightly higher than average among recent immigrants (defined as people born outside New Zealand who had lived in New Zealand for less than five years) and people living outside the main urban areas. Women with dependent children were much more likely to be working in temporary jobs than men with dependent children. This was true of both sole mothers and mothers in two-parent families.

The relationship between educational attainment and the incidence of temporary work is not a simple one. The incidence rate is highest among employees with no qualifications, but it is also relatively high among workers with degrees, and is lower for some of the intermediate educational levels. The incidence rates among workers aged 30 years and over by level of qualification are also shown in the table, in order to exclude the majority of students from the analysis. The exclusion of young people does not change the fact that educational level and incidence rates are not strongly correlated, although workers with no qualifications continue to have the highest rate of temporary work.

There is a striking difference between part-time and full-time employees in temporary work incidence. While 6 percent of full-time employees held temporary jobs, 20 percent of part-time employees did so. The incidence of temporary work was also particularly high among people whose usual weekly hours were in the 0-19 range.

The other columns of table 1 give information on the incidence of the four main types of temporary work. A few clear patterns emerge. First, youth employees and employees aged 65 and over were particularly likely to be employed in casual jobs. The casual work incidence rates for these age groups were over 10 percent, compared with 2-4 percent for the intervening age groups. The incidence of other types of temporary work did not vary as much by age.

Second, more highly educated employees were more likely to be working in a fixed-term job than those with lower levels of education. The incidence of employment in fixed-term jobs was 4.4 percent for those with a degree but only 1.2 percent for those with no qualifications. At the same time, more highly educated employees were less likely to be working in casual or seasonal jobs than employees with no qualifications or only school qualifications.

Incidence patterns by firm characteristics, occupation and industry

Temporary work incidence rates by occupation, industry, business type and size of firm are summarised in table 2. The 'agriculture and fishery workers' occupational group and the 'elementary' occupational group had the highest proportions of their workers in temporary jobs: 23 percent and 19 percent of the employees in these occupational groups were in temporary arrangements. Data on occupational groups defined at a more detailed two-digit level (not shown in the table) indicate that the incidence of temporary work was also relatively high among teaching professionals (12 percent), other associate professionals (11 percent), personal and protective services workers (13 percent), and stationary machinery operators and assemblers (17 percent).

Table 2: The incidence of temporary work by job characteristics

The 'agriculture and fishery' and the 'elementary' occupational groups had the highest incidence of casual employment. The professional and the 'technicians and associate professional' occupational groups had the highest incidence of fixed-term employment. The incidence of seasonal employment was highest within the 'agriculture and fishery workers' and the 'plant and machine operators and assemblers' occupational groups.

Turning to industries, four major industries had the highest proportions of their workforces in temporary jobs: agriculture, forestry and fishing (24 percent); accommodation, cafes and restaurants (16 percent), education (15 percent) and cultural and recreational services (18 percent). At a more detailed two-digit industry level (not shown in the table), the incidence of temporary work was also particularly high among workers in agriculture (23 percent), services to agriculture (37 percent), food, beverages and tobacco manufacturing (23 percent), motion picture, radio and television services (18 percent), libraries, museums and the arts (18 percent), and sport and recreation (17 percent).

Figure 3: Temporary work rates by industry

Data table for Figure 3

Considering the use of different types of temporary work in different industries, the data show that the agriculture, fishing and forestry industry made greatest use of casual and seasonal employment arrangements. The education industry had the highest fraction of its workforce employed on fixed-term arrangements (8 percent of its employees). The property and business services industry employed the highest fraction of workers in temporary agency jobs (with 3 percent of its employees in this job type), probably because temporary employment agencies are classified to this major industry group.

Figure 4: Temporary work rates by business type

Data table for Figure 4

Turning to business type, it appears that the incidence of temporary work was slightly higher within the workforces of government organisations and not-for-profit organisations than in private sector firms. Specifically, the incidence was 8 percent in the private sector, 10 percent in central government, 10 percent in local government and 11 percent in the not-for-profit sector. These results could, however, be distorted by the fact that a relatively high proportion of temporary employees (and a smaller but still substantial proportion of permanent employees) could not be classified to a business type.^[6] If most of the 'unclassified' temporary employees were employed by private sector firms, the true incidence of temporary work might be similar across the private and public sectors.

One clear pattern is that central and local government employees were more likely than private sector employees to be employed on fixed-term contracts. This is due to a relatively high level of fixed-term employment arrangements in the education industry, and to a lesser extent in government administration and health services.

There were minor variations in the incidence of temporary work across differently sized establishments and enterprises. A greater fraction of employee positions were temporary in the very smallest establishments (those with less than five employees) and in the largest establishments (those with 100 or more employees) than in the intermediate size categories. Temporary employment was also slightly more common in the smallest and largest enterprises than in small and medium sized enterprises. It is possible that these firm size variations are caused by other factors, such as the variations in the use of temporary employment relationships across industries and occupations. It is also possible that these results are somewhat distorted by the relatively high rate of non-classification (13 percent of temporary employees and 8 percent of permanent employees could not be assigned to a firm size group).^[7]

3.3 Worker characteristics and the likelihood of working in a temporary job

Although looking at the bivariate results on the incidence of temporary work is interesting, when considering the relationship between any particular characteristic and temporary work, it is important to control for other factors that may also be influencing the probability of holding a temporary job. Binomial logistic regressions were estimated to explore the association between particular individual characteristics and temporary work, while holding all other variables constant. These regression models use information on the personal characteristics of individuals to predict the likelihood of being in a temporary rather than a permanent job. Using the model estimates, the impact (or marginal effect) of a change in one characteristic on the chance of participating, while holding all other measured characteristics constant at their mean values, can be estimated.

The models were estimated for males and females separately. Separate models were estimated for the following outcomes: employed in a casual job; employed in a fixed-term job; and employed in a seasonal job. These were treated as separate outcomes because the two-variable results indicated there are substantial differences in the characteristics of people doing different types of temporary work. In the estimation of each model, the records of temporary workers who were employed in other types of arrangement were dropped from the estimation sample. Therefore, the estimates capture the association between personal characteristics and the likelihood of working in a specific type of temporary work as opposed to permanent work.

The following variables were included as explanatory variables: five-year age group; ethnic group; born overseas and arrived less than 5 years ago; born overseas and arrived 5-10 years ago; born overseas and arrived more than 10 years ago; living in a minor or provincial urban area; living in a rural location; sole parent of a dependent child or children, and joint parent of a dependent child or children; highest qualification; and whether the individual was working on a part-time basis.

The full results of the logistic regressions are set out in tables A.1 to A.3 in Appendix 3. Table 3 summarises the statistically significant effects that were identified, expressed in the form of marginal effects. A marginal effect represents the impact of a change in a particular variable (eg in the case of ethnicity, moving from 'European' to 'Maori') on the probability of a particular outcome (eg, working in a casual job). Each number in the table can be interpreted as the estimated increase or reduction in the probability of working in a casual/fixed term/seasonal job experienced by individuals with the characteristic shown, relative to the probability of the omitted group. The omitted categories are 40-44 year olds in the case of age; European in the case of ethnic group; New Zealand-born in the case of immigrant status; living in a major urban area in the case of geographical location; having no dependent children in the case of parental status; having lower high school qualifications only in the case of educational qualifications; and working on a full-time basis. Note that we present and discuss all marginal effects that were statistically significant at the 90 percent confidence level, or higher. The stars in the table indicate the relative levels of significance.^[8]

Table 3: Marginal effects of personal characteristics on the probability of working in a temporary job

For males, the characteristics that are positively and significantly associated with working in a casual job after other demographic characteristics are held constant at their mean values are: being aged 15-19 or 20-24, living in a minor urban area, having no qualifications, and working on a part-time basis. Part-time employment shows the strongest association: relative to full-time employed men, men who were part-time employed were 12.6 percentage points more likely to be working in a casual job. Relative to men aged 40-44, men in the 15-19 years age group or in the 20-24 years age group were 4.9 percentage points more likely to be working in a casual job. Most of the other effects found in the regression for males in casual work are relatively small in magnitude. Recent immigrants were slightly less likely to be employed in a casual job than the New Zealand born, and men without dependent children were less likely to be employed in a casual job than men without dependent children.

For women, the characteristics that are positively and significantly associated with working in a casual job after other demographic characteristics are held constant are being aged 15-19, and working on a part-time basis. Part-time employed women were 7.8 percentage points more likely to be working in a casual job than their full-time employed counterparts, and teenage women were 4.8 percentage points more likely to be working in a casual job than women aged 40-44.

Turning to fixed term employment, men with degree qualifications were significantly more likely to be employed in a fixed-term job than men in the omitted group (those with lower high school qualifications only). Men of Maori/European ethnicity were slightly less likely to be working in a fixed-term job than other ethnic groups. Both these marginal effects are quite small, however. The fixed-term employment regression for women also shows that women with degrees were more likely to be working in a fixed-term job: the marginal effect is 7.4 percentage points. Overall, relatively few personal characteristics appear to have a significant influence on the probability of an individual being in a fixed-term job rather than a permanent job, implying that fixed-term and permanent employees are fairly similar on most dimensions, or at least the dimensions considered here.

Turning to seasonal employment, men aged 15-19 and men who were living in a minor urban area were more likely to be working in a seasonal job than older men and those living in the main urban centres. Established immigrants and men with degrees were less likely to be working in a seasonal job than New Zealanders and other educational attainment groups.

Maori women, Pacific women, women living in minor or provincial urban areas and women living in rural locations, and part-time employed women, had an increased likelihood of working in a seasonal job. Women aged 30-34, 35-39, 55-59 and 60-64 had a slightly reduced likelihood of working in a seasonal job than women aged 40-44, and Asian women and established immigrants were slightly lower likelihood of working in a seasonal job than the omitted European and New Zealand-born group.

Summarising these patterns, we find strong positive relationships between working on a part-time basis and working in a casual job, and between being a teenager and working in a casual job. Degree qualifications are a significant predictor of working in a fixed-term job. Living in a minor urban centre or a rural area is associated with a higher likelihood of seasonal employment for both men and women. Teenage males have a higher likelihood of being employed in seasonal jobs, as do women of Maori or Pacific ethnicity.

3.4 Summary

Approximately one in ten employees (9.4 percent) were working in temporary jobs in the March 2008 quarter. One in twenty employees (4.9 percent) were employed on a casual basis, 2.3 percent were employed on a fixed-term contract, and 0.7 percent worked for a temporary employment agency. Nearly three percent of all employees (2.7 percent) were working in seasonal jobs.

Youth employees had the highest rate of temporary employment. Women aged between 25 and 54, and employees aged 65 years and over of both genders, were also substantially more likely to be working in a temporary job than prime-aged men. The incidence of temporary work was also much higher among part-time than full-time employees.

The incidence patterns differed across different types of temporary work. Youth workers were particularly likely to be working in casual jobs. Tertiary educated employees had a higher rate of employment in fixed-term jobs than those with lower levels of education. Employees with low levels of educational attainment were more likely to be employed in casual or seasonal jobs.

In a multivariate analysis of factors influencing the probability of working in a temporary job, life-cycle stage (being at the start or end of the working age range) and part-time employment were identified as the characteristics most strongly associated with a higher likelihood of temporary employment.

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