Fixed‐Term Contracts: Short‐Term Blessings or Long‐Term Scars? Empirical Findings from the Netherlands 1980–2000

Using a comprehensive longitudinal dataset of prime‐age Dutch workers over the period 1980–2000, we examine how a previously held job with a fixed‐term contract influences both the likelihood and the duration of a future spell of unemployment. Analyses show that Dutch workers with fixed‐term contracts experience higher risks of future unemployment and have no shorter spells of unemployment compared to workers with regular contracts. Results also reveal that swifter employment re‐entries among men with fixed‐term contracts can be explained by their job search efforts before unemployment. Our study (partly) invalidates theoretical positions that claim that fixed‐term contracts foster employment security by shortening unemployment durations; suggesting that fixed‐term contracts are a short‐term blessing that could end, for some workers, in a recurrent unemployment trap.