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121 Monthly Lab. Rev. 3 (1998)
The Long-Term Consequences of Nontraditional Employment

handle is hein.journals/month121 and id is 471 raw text is: The long-term consequences of nontraditional employment Lower pay offormer temporary employees and higher pay of men formerly self-employed are likely caused by unobserved heterogeneity; nonetheless, in wage growth models that eliminate this bias, past part-time work has a negative effect on current wages, which varies with gender and whether the part-time status was voluntary or involuntary Marianne A. Ferber and Jane Waldfogel Marianne A. Ferber is professor of economics, University of Illinois, Champaign- Urbana, Illinois. Jane Waldfogel is assistant professor of social work and public affairs, School of Social Work, Columbia University, New York, New York. ,he October 1996 special issue of the Monthly Labor Review profiled workers in nontraditional work arrangements and analyzed their reasons for entering such employ- ment. Several articles in the same issue of the Review reported on the earnings and benefits of nonstandard workers: Steven Hipple and Jay Stewart found that contingent workers tend to earn less, and are less likely to have health insur- ance and pension benefits, than noncontingent workers, and that some alternative workers, such as self-employed men, earn more than traditional or standard workers, but are less likely to have health insurance and pension coverage;2 and Donna Rothstein, using longitudinal data from the National Longitudinal Survey of Youth (NLSY), compared earnings on the current job with earnings on the previous job, for a select sample of workers who had been on their current job for no more than 3 years.3 Interestingly, she found that, for the typical contingent worker in her sample, the current job represented a step down from the previous job, whereas for full-time, standard workers, the current job tended to represent a step up from the previous job. These results, as well as some from earlier re- search,4raise a host of questions about the longer term consequences of nontraditional employ- ment. For example, because workers engaged in such employment not only have shorter job ten- ures,5 but also are more likely to be assigned to routine jobs, to receive less training (particularly important for workers without a college educa- tion) and fewer promotions, and to be laid off,6 they may receive lower wages and benefits in the long run. Thus, to the extent that the problems associated with nontraditional work turn out to be more serious in the long run than in the short run, and to the extent that individuals are unaware that this is the case or have a short planning hori- zon, it may be that many of those who choose this type of employment voluntarily will eventu- ally suffer serious deprivation as a result.7 With the exception of a handful of studies on the wage growth of part-time workers,8 there has been no research to date on these long-term effects. This article seeks to fill that gap. The research to be presented uses the NLSY to investigate the long-term consequences of three types of nontraditional employment on individu- als' subsequent earnings and benefits.9 Building on what is already known about the contingent labor force, we investigate the following ques- tions, which have not been addressed in the re- search to date: First, how does nontraditional employment (that is, one's ever having had a nontraditional job) affect subsequent earnings and benefits? Second, are the returns to nontra- ditional work experience (that is, the length of time one spends in nontraditional jobs) different from the returns to traditional work experience? Monthly Labor Review May 1998 3

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