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Abstract

We use administrative data from the unemployment insurance system State of Washington to study the magnitude of the wage differential associated with work in the temporary services industry. We find that temp wage rates are 15% to 20% below the levels that might have been expected based on trends during other periods in workers' careers even after controlling for differences between temps and other workers. Comparing temp wages immediately before and after temp work or to the wages on non-temp jobs begun during the same period as workers were in the temp industry yields estimates of the temp work penalty as low as 10%.

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Paper provided by Federal Reserve Bank of Chicago in its series Working Paper Series with number WP-98-23.

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Date of creation: 1998
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Handle: RePEc:fip:fedhwp:wp-98-23

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Keywords: Wages ; Temporary employees;

References

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1. Ruhm, Christopher J, 1991. "Are Workers Permanently Scarred by Job Displacements?," American Economic Review, American Economic Association, vol. 81(1), pages 319-24, March.
2. Jacobson, Louis S & LaLonde, Robert J & Sullivan, Daniel G, 1993. "Earnings Losses of Displaced Workers," American Economic Review, American Economic Association, vol. 83(4), pages 685-709, September.
   
   • Louis S. Jacobson & Robert J. LaLonde & Daniel G. Sullivan, 1992. "Earnings losses of displaced workers," Working Paper Series, Macroeconomic Issues 92-28, Federal Reserve Bank of Chicago.
   • Louis S. Jacobson & Robert J. LaLonde & Daniel Sullivan, 1992. "Earnings Losses of Displaced Workers," Upjohn Working Papers and Journal Articles 92-11, W.E. Upjohn Institute for Employment Research.
3. John Abowd & Orley Ashenfelter, 1980. "Anticipated Unemployment, Temporary Layoffs and Compensating Wage Differentials," Working Papers 517, Princeton University, Department of Economics, Industrial Relations Section..
   
   • John M. Abowd & Orley C. Ashenfelter, 1981. "Anticipated Unemployment, Temporary Layoffs, and Compensating Wage Differentials," NBER Chapters, in: Studies in Labor Markets, pages 141-186 National Bureau of Economic Research, Inc.
4. Heckman, J.J. & Hotz, V.J., 1988. "Choosing Among Alternative Nonexperimental Methods For Estimating The Impact Of Social Programs: The Case Of Manpower Training," University of Chicago - Economics Research Center 88-12, Chicago - Economics Research Center.
   
   • James J. Heckman, 1989. "Choosing Among Alternative Nonexperimental Methods for Estimating the Impact of Social Programs: The Case of Manpower Training," NBER Working Papers 2861, National Bureau of Economic Research, Inc.
5. Lori G. Kletzer, 1998. "Job Displacement," Journal of Economic Perspectives, American Economic Association, vol. 12(1), pages 115-136, Winter.
6. David H. Autor, 2000. "Why Do Temporary Help Firms Provide Free General Skills Training?," NBER Working Papers 7637, National Bureau of Economic Research, Inc.
   
   • David H. Autor, 2001. "Why Do Temporary Help Firms Provide Free General Skills Training?," The Quarterly Journal of Economics, MIT Press, vol. 116(4), pages 1409-1448, November.
7. Bruce C. Fallick, 1995. "A review of the recent empirical literature on displaced workers," Finance and Economics Discussion Series 95-14, Board of Governors of the Federal Reserve System (U.S.).
   
   • Bruce C. Fallick, 1996. "A review of the recent empirical literature on displaced workers," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 50(1), pages 5-16, October.
8. Lewis Segal & Daniel Sullivan, 1996. "The growth of temporary services work," Working Paper Series, Macroeconomic Issues WP-96-26, Federal Reserve Bank of Chicago.
   
   • Lewis M. Segal & Daniel G. Sullivan, 1997. "The Growth of Temporary Services Work," Journal of Economic Perspectives, American Economic Association, vol. 11(2), pages 117-136, Spring.
9. Lewis M. Segal & Daniel G. Sullivan, 1997. "Temporary services employment durations: evidence from state UI data," Working Paper Series, Macroeconomic Issues WP-97-23, Federal Reserve Bank of Chicago.
10. Topel, Robert, 1990. "Specific capital and unemployment: Measuring the costs and consequences of job loss," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 33(1), pages 181-214, January.
11. Topel, Robert H, 1984. "Equilibrium Earnings, Turnover, and Unemployment: New Evidence," Journal of Labor Economics, University of Chicago Press, vol. 2(4), pages 500-522, October.
12. Lewis M. Segal & Daniel G. Sullivan, 1995. "The temporary labor force," Economic Perspectives, Federal Reserve Bank of Chicago, issue Mar, pages 2-19.

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Cited by:

1. Michael Kvasnicka & Axel Werwatz, 2003. "On the Wages of Temporary Help Service Workers in Germany," Labor and Demography 0309004, EconWPA.
   
   • Kvasnicka, Michael & Werwatz, Axel, 2002. "On the wages of temporary help service workers in Germany," SFB 373 Discussion Papers 2002,70, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
2. David H. Autor, 2000. "Why Do Temporary Help Firms Provide Free General Skills Training?," NBER Working Papers 7637, National Bureau of Economic Research, Inc.
   
   • David H. Autor, 2001. "Why Do Temporary Help Firms Provide Free General Skills Training?," The Quarterly Journal of Economics, MIT Press, vol. 116(4), pages 1409-1448, November.
3. Yukako Ono & Daniel Sullivan, 2008. "Manufacturing Plants' Use of Temporary Workers: An Analysis Using Census Micro Data," Working Papers 08-40, Center for Economic Studies, U.S. Census Bureau.
   
   • Yukako Ono & Daniel G. Sullivan, 2006. "Manufacturing plants’ use of temporary workers: an analysis using census micro data," Working Paper Series WP-06-24, Federal Reserve Bank of Chicago.
4. David H. Autor, 2000. "Outsourcing at Will: Unjust Dismissal Doctrine and the Growth of Temporary Help Employment," JCPR Working Papers 153, Northwestern University/University of Chicago Joint Center for Poverty Research.
   
   • David H. Autor, 2000. "Outsourcing at Will: Unjust Dismissal Doctrine and the Growth of Temporary Help Employment," NBER Working Papers 7557, National Bureau of Economic Research, Inc.
5. René Böheim & Ana Rute Cardoso, 2009. "Temporary Help Services Employment in Portugal, 1995-2000," NBER Chapters, in: Studies of Labor Market Intermediation, pages 309-334 National Bureau of Economic Research, Inc.
   
   • Rene Boeheim & Ana Rute Cardoso, 2007. "Temporary Help Services Employment in Portugal, 1995-2000," NBER Working Papers 13582, National Bureau of Economic Research, Inc.
6. Böheim, René & Cardoso, Ana Rute, 2007. "Temporary Agency Work in Portugal, 1995–2000," IZA Discussion Papers 3144, Institute for the Study of Labor (IZA).
7. Marloes de Graaf-Zijl, 2005. "The Anatomy of Job Satisfaction and the Role of Contingent Employment Contracts," Tinbergen Institute Discussion Papers 05-119/3, Tinbergen Institute.
8. Michael Kvasnicka, 2003. "Inside the Black Box of Temporary Help Agencies," Labor and Demography 0311001, EconWPA.
   
   • Michael Kvasnicka, 2003. "Inside the Black Box of Temporary Help Agencies," Labor and Demography 0310003, EconWPA.
   • Kvasnicka, Michael, 2003. "Inside The Black Box of Temporary Help Agencies," SFB 373 Discussion Papers 2003,43, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
9. Addison, John T. & Surfield, Christopher J., 2005. "‘Atypical Work’ and Compensation," IZA Discussion Papers 1477, Institute for the Study of Labor (IZA).
   
   • John T. Addison & Christopher J. Surfield, 2005. "‘Atypical Work’ and Compensation," GEMF Working Papers 2005-14, GEMF - Faculdade de Economia, Universidade de Coimbra.
10. Marloes de Graaf-Zijl, 2005. "Compensation of On-call and Fixed-term Employment: the Role of Uncertainty," Tinbergen Institute Discussion Papers 05-120/3, Tinbergen Institute.
11. Elke J. Jahn, 2010. "Reassessing the Pay Gap for Temps in Germany," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 230(2), pages 208-233.
12. Jahn, Elke J., 2008. "Reassessing the Wage Penalty for Temps in Germany," IZA Discussion Papers 3663, Institute for the Study of Labor (IZA).
13. Arindrajit Dube & Ethan Kaplan, 2010. "Does Outsourcing Reduce Wages in the Low-Wage Service Occupations? Evidence from Janitors and Guards," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 63(2), pages 287-306, January.
    
    • Dube, Arindrajit & Kaplan, Ethan, 2008. "Does Outsourcing Reduce Wages in the Low Wage Service Occupations? Evidence from Janitors and Guards," Institute for Research on Labor and Employment, Working Paper Series qt6s89498v, Institute of Industrial Relations, UC Berkeley.

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