Locked-in casual employment

A significant part of the employment creation in Australia between 1992 and 2008 has been of casual nature. Casual workers have low levels of job security, no holiday and/or sick leave, little opportunities to train, but may receive higher wages. If secure and permanent employment was available, casual work would only likely be the first-choice option to those who have no ambition to develop a career in that line of work. However, when secure and permanent employment opportunities are constrained, casual employment would also become an attractive alternative, if it provides a pathway to non-casual employment.\ud \ud The scant longitudinal research in Australia that has been conducted to date which adopts a supply-side approach, has failed to find any conclusive evidence to support the stepping stone hypothesis. In contradistinction, in a previous paper we allowed for include the impact of labour demand and the macro-economic influences on the transition rate towards non-casual employment. We showed that industry-type, occupation, firm size, overall macroeconomic labour market conditions and the degree of urbanisation of the region all affect the transition rate from casual to non-casual employment.\ud \ud In this paper, we test the duration dependence hypothesis in a hazard rate setting using information contained in the HILDA dataset, which refers to career developments before the inception of the data collection in 2001. We use this information to test whether duration dependence affects both the likelihood of transiting upwards (towards non-casual employment) and transiting downwards (towards unemployment). If both transition rates decrease over time, then it is reasonable to conclude that workers are locked into casual employment. If the former reduces over time and the latter increases or is unaffected by time in casual employment, then it is reasonable to conclude that workers cycle through casual employment, unemployment and/or stay outside the labour force, without any realistic future to move upwards. The paper finds evidence that under certain circumstances, casual workers are locked-in to repetitive spells of casual work with little change of escape