This study examines the stepping stone effect of part‐time employment for working‐age Australians. Using the Household, Income and Labour Dynamics in Australia (HILDA) Survey, the study finds that part‐time employment increases the probability of future full‐time employment by approximately nine percentage points for males and approximately six percentage points for females, compared to those who were initially not in the labour force, after observed and unobserved individual heterogeneity is accounted for. However, part‐time employment does not appear to have a stepping stone effect when compared with unemployment.