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Manufacturing Plants' Use of Temporary Workers: An Analysis Using Census Microdata

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  • Yukako Ono
  • Daniel Sullivan

Abstract

Using plant-level data from the Plant Capacity Utilization (PCU) Survey, we examine how manufacturing plants’ use of temporary workers is associated with the nature of their output fluctuations and other plant characteristics. We find that plants tend to hire temporary workers when their output can be expected to fall, a result consistent with the notion that firms use temporary workers to reduce costs associated with dismissing permanent employees. In addition, we find that plants whose future output levels are subject to greater uncertainty tend to use more temporary workers. We also examine the effects of wage and benefit levels for permanent workers, unionization rates, turnover rates, seasonal factors, and plant size and age on the use of temporary workers; based on our results, we discuss various views of why firms use temporary workers.

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File URL: http://hdl.handle.net/10.1111/10.1111/irel.12018
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Bibliographic Info

Article provided by Wiley Blackwell in its journal Industrial Relations: A Journal of Economy and Society.

Volume (Year): 52 (2013)
Issue (Month): 2 (04)
Pages: 419-443

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Handle: RePEc:bla:indres:v:52:y:2013:i:2:p:419-443

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References

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  1. Lewis Segal & Daniel Sullivan, 1996. "The growth of temporary services work," Working Paper Series, Macroeconomic Issues WP-96-26, Federal Reserve Bank of Chicago.
  2. Susan N. Houseman, 2001. "Why employers use flexible staffing arrangements: Evidence from an establishment survey," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 55(1), pages 149-170, October.
  3. Lawrence F. Katz & Alan B. Krueger, 1999. "The High-Pressure U.S. Labor Market of the 1990s," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 30(1), pages 1-88.
  4. Daniel Aaronson & Ellen Rissman & Daniel G. Sullivan, 2004. "Can sectoral reallocation explain the jobless recovery?," Economic Perspectives, Federal Reserve Bank of Chicago, issue Q II, pages 36-39.
  5. Marcello Estevao & Saul Lach, 1999. "Measuring temporary labor outsourcing in U.S. manufacturing," Finance and Economics Discussion Series 1999-57, Board of Governors of the Federal Reserve System (U.S.).
  6. Lewis M. Segal & Daniel G. Sullivan, 1995. "The temporary labor force," Economic Perspectives, Federal Reserve Bank of Chicago, issue Mar, pages 2-19.
  7. Lewis M. Segal & Daniel G. Sullivan, 1998. "Wage differentials for temporary services work: evidence from administrative data," Working Paper Series WP-98-23, Federal Reserve Bank of Chicago.
  8. Susan N. Houseman, . "Why Employers Use Flexible Staffing Arrangements: Evidence from an Establishment Survey," Upjohn Working Papers and Journal Articles snh2001, W.E. Upjohn Institute for Employment Research.
  9. Susan N. Houseman & Arne L. Kalleberg & George A. Erickcek, 2001. "The Role of Temporary Help Employment in Tight Labor Markets," Upjohn Working Papers and Journal Articles 01-73, W.E. Upjohn Institute for Employment Research.
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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Part-Time America: Some Context, Please
    by James Sherk in The Foundry on 2013-07-11 13:23:25
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Cited by:
  1. Matthew Dey & Susan Houseman & Anne Polivka, 2009. "What Do We Know about Contracting Out in the United States? Evidence from Household and Establishment Surveys," Upjohn Working Papers and Journal Articles 09-157, W.E. Upjohn Institute for Employment Research.
  2. Britton Lombardi & Yukako Ono, 2008. "Professional employer organizations: What are they, who uses them, and why should we care?," Economic Perspectives, Federal Reserve Bank of Chicago, issue Q IV, pages 2-14.
  3. Hirokatsu Asano & Takahiro Ito & Daiji Kawaguchi, 2011. "Why Has the Fraction of Contingent Workers Increased? A Case Study of Japan," IDEC DP2 Series 1-3, Hiroshima University, Graduate School for International Development and Cooperation (IDEC).
  4. Christopher L. House & Jing Zhang, 2012. "Layoffs, Lemons and Temps," NBER Working Papers 17962, National Bureau of Economic Research, Inc.

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