Do temporary employees experience increased material deprivation? Evidence from German panel data

Economic insecurity has recently received increasing attention as a determinant of material deprivation. We contribute to this line of research by analysing the relationship between temporary employment and material deprivation. We argue that temporary workers face exacerbated deprivation because they may forego basic needs to provide for an uncertain future. Using German panel data for the years 2008–2020, we find that temporary employment increases material deprivation among workers, particularly in low-income households. This finding is robust to our controlling for important variables such as household income and needs, individual- and household fixed effects and when considering lagged independent variables. The association is not driven by young or highly educated workers who may be more likely to hold temporary jobs without experiencing sustained material deprivation. We also find that temporary agency work, perceived job insecurity and firm turnover rates aggravate material deprivation. This supports the theoretical assumption that the impact of temporary employment on material deprivation is driven by the economic insecurities faced by temporary workers.