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Wednesday, January 26, 2005

Study: Earnings of temporary versus permanent employees


Temporary work accounted for almost one-fifth of overall growth in paid employment between 1997 and 2003 despite a period of economic growth and favourable employment conditions.

However, a new study shows that temporary jobs are generally less well paid than permanent ones. In addition, the gap between the two groups varied with the type of temporary employment.

The study "Earnings of temporary versus permanent employees", released today in the online edition of Perspectives on Labour and Income, examines the salary gap for the first time on the basis of the type of temporary employment. Temporary workers are not a homogenous group. Their characteristics vary greatly depending on whether their jobs are term or contract, seasonal, casual, or obtained through an employment agency.

The study showed that in 2003, temporary workers earned 16% less per hour than their permanent counterparts, or $16.69 compared with $19.98.

Between 1997 and 2003, this gap between the two groups ranged from 16% less per hour to 19% less per hour.

A high proportion of contract workers held high-skill jobs, while the majority of seasonal workers were men, with relatively low education levels. Casual employees were mostly women and often worked part time. Temporary workers hired through employment agencies sometimes had high levels of education, but worked in generally lower-skill occupations.

Of the four types of temporary workers, contract employees showed the smallest gap, earning an average of 8% less than their permanent counterparts in 2003.

On the other hand, seasonal workers earned 28% less than their permanent counterparts, casual workers 24% less and those using employment agencies 40% less.

A substantial portion of the wage gap could be attributed to the heavy concentration of certain temporary workers (female seasonal workers, casual workers and workers using employment agencies) in unskilled occupations and in industries with lower-paying jobs. A significant earnings gap persisted even after taking into account the number of hours worked and family situation.

In general, taking the number of hours into account increased the gap because temporary workers put in fewer hours per week. In contrast, taking the contribution of spousal earnings (for temporary workers in spousal relationships) into account reduced it.

After these factors were taken into account for people in spousal relationships, contract workers still posted the smallest gaps in relation to permanent workers. Male contract workers earned 8% less than their permanent counterparts, while female contract workers earned 6% less.

The gap in earnings between male seasonal workers and their permanent counterparts declined from an initial 28% to only 18%. This was primarily because male seasonal employees worked 6% more hours than permanent employees and, to a lesser extent, because of the contribution of spousal earnings.

For female seasonal employees, casual employees (73% of whom are women), and those who used employment agencies (50% women), the average earnings gap varied between 24% and 28% and persisted even when taking their number of hours and family situation into account.

Definitions, data sources and methods: survey number 3701.

The article "Earnings of temporary versus permanent employees" is available today in the January 2005 online edition of Perspectives on Labour and Income, Vol. 6, no. 1 (75-001-XIE, $6/$52).

For more information, or to enquire about the concepts, methods or data quality of this release, contact Diane Galarneau (613-951-4626;, Labour and Household Surveys Analysis Division.

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Date Modified: 2005-01-26 Important Notices