Fixed-term contracts are regarded as an instrument for increasing labor market flexibility. However, European countries differ significantly in the prevalence of temporary jobs. A comparison shows that temporary employment promotes labor market mobility to only a limited extent. While it facilitates labor market access in part, it also leads to unstable employment relationships and segmented labor markets with few opportunities for advancement. To create sustainable employment and facilitate transitions into permanent jobs, EU states must combine reforms of employment protection with investment in education and training as well as in active labor market policies.