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Employment Protection and Temporary Work Agencies

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  • Florian Baumann
  • Mario Mechtel
  • Nikolai Stähler

Abstract

Employers who use temporary agency staff in contrast to regular staff are not affected by employment protection regulations when terminating a job. Therefore, services provided by temporary work agencies may be seen as a substitute for regular employment. In this paper, we analyze the effects of employment protection on the size of the temporary work agency sector in a model of equilibrium unemployment. We find that higher firing costs may even reduce temporary work agency employment if agencies themselves are subject to employment protection, a consideration which distinguishes our results from those for fixed-term employment arrangements.
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Suggested Citation

  • Florian Baumann & Mario Mechtel & Nikolai Stähler, 2011. "Employment Protection and Temporary Work Agencies," LABOUR, CEIS, vol. 25(3), pages 308-329, September.
    • Handle: RePEc:bla:labour:v:25:y:2011:i:3:p:308-329
    DOI: j.1467-9914.2010.00493.x
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    Cited by:

    1. Alejandro Micco & Pablo Muñoz-Henríquez, 2018. "The Impact of Extended Employment Protection Laws on the Demand for Temporary Agency Workers," Working Papers wp463, University of Chile, Department of Economics.
    2. Beissinger, Thomas & Baudy, Philipp, 2015. "The impact of temporary agency work on trade union wage setting: A theoretical analysis," Hohenheim Discussion Papers in Business, Economics and Social Sciences 01-2015, University of Hohenheim, Faculty of Business, Economics and Social Sciences.
    3. Baumann, Florian & Friehe, Tim, 2012. "On the evasion of employment protection legislation," Labour Economics, Elsevier, vol. 19(1), pages 9-17.
    4. Christian Welzel & Ronald Inglehart, 2013. "Evolution, empowerment and emancipation: How societies ascend the utility ladder of freedoms," HSE Working papers WP BRP 29/SOC/2013, National Research University Higher School of Economics.
    5. Baudy, Philipp & Cords, Dario, 2016. "Deregulation of temporary agency employment in a unionized economy: Does this really lead to a substitution of regular employment?," Hohenheim Discussion Papers in Business, Economics and Social Sciences 06-2016, University of Hohenheim, Faculty of Business, Economics and Social Sciences.

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    More about this item

    JEL classification:

    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General

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