The effect of employment in new firms on a career path: Is it a stepping stone toward long-term employment?
(English)Manuscript (preprint) (Other academic)
Previous research shows that new firms provide unstable employment because the risk of failure of new firms is high. At the same time, new firms attract and employ a disproportionately larger share of individuals with weaker positions in the labour market. This paper studies the role new firms play in determining the career paths of their employees and analyses whether short- term employment in new firms (employment lasting less than one year) may serve as a stepping stone towards long-term employment (at least two years of employment with the same employer) for non-employed individuals. Individual-level data from a Swedish matched employee-employer database are used collected from five years (2001-2005). A propensity score analysis is used in the empirical analysis. The findings indicate that short-term employment in new firms may serve as a stepping stone towards a long-term employment for both women and men. Moreover, the new firm effect on the probability of long-term employment is positive even for new firm employees who leave their firms involuntarily due to firm closure.
IdentifiersURN: urn:nbn:se:kth:diva-192518OAI: oai:DiVA.org:kth-192518DiVA: diva2:970500
QC 201609142016-09-132016-09-132016-09-14Bibliographically approved