Using both public and confidential data, the authors summarize how the intensity of use of professional employer organization (PEO) services varies across industries and geographical areas. Their analyses using microdata of manufacturing establishments suggest that the use of PEO services depends on the size of the establishment and of its parent firm. The use of PEO services is greater for newly constructed establishments, as well as for establishments with a potentially high injury and illness rate. Greater diversification across industries and geographical areas of a parent firm may also increase an establishment's use of PEO services.
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Article provided by Federal Reserve Bank of Chicago in its journal Economic Perspectives.
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