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Temporary work agencies and equilibrium unemployment

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Author Info

  • Neugart, Michael

    (Minda de Gunzburg Center for European Studies, Harvard University)

  • Storrie, Donald

    (Centre for European Labour Market Studies, Department of Economics)

Abstract

A striking feature of OECD labor markets in the 1990s has been the very rapid increase of temporary agency work. We augment the equilibrium unemployment model as developed by Pissarides and Mortensen with temporary work agencies in order to focus on their role as matching intermediaries and to examine the aggregate impact on employment. Our model implies that the improvement in the matching e±ciency of agencies led to the emergence and growth of temporary agency work. We also show that temporary agency work does not necessarily crowd-out other jobs.

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File URL: http://hdl.handle.net/2077/2867
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Bibliographic Info

Paper provided by University of Gothenburg, Department of Economics in its series Working Papers in Economics with number 83.

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Length: 30 pages
Date of creation: 25 Oct 2002
Date of revision:
Handle: RePEc:hhs:gunwpe:0083

Contact details of provider:
Postal: Department of Economics, School of Business, Economics and Law, University of Gothenburg, Box 640, SE 405 30 GÖTEBORG, Sweden
Phone: 031-773 10 00
Web page: http://www.handels.gu.se/econ/
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Keywords: temporary work agencies; matching model; equilibrium unemployment; crowding-out;

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References

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  1. Fredriksson, Peter & Holmlund, Bertil, 2001. "Optimal Unemployment Insurance in Search Equilibrium," Journal of Labor Economics, University of Chicago Press, vol. 19(2), pages 370-99, April.
  2. Booth, Alison L. & Francesconi, Marco & Frank, Jeff, 2000. "Temporary Jobs: Stepping Stones or Dead Ends?," IZA Discussion Papers 205, Institute for the Study of Labor (IZA).
  3. Juan J Dolado & Carlos Garcia--Serrano & Juan F. Jimeno, 2002. "Drawing Lessons From The Boom Of Temporary Jobs In Spain," Economic Journal, Royal Economic Society, vol. 112(721), pages F270-F295, June.
  4. Bertil Holmlund & Donald Storrie, 2002. "Temporary Work In Turbulent Times: The Swedish Experience," Economic Journal, Royal Economic Society, vol. 112(480), pages F245-F269, June.
  5. Fonseca, Raquel & Lopez-Garcia, Paloma & Pissarides, Christopher A., 2001. "Entrepreneurship, start-up costs and employment," European Economic Review, Elsevier, vol. 45(4-6), pages 692-705, May.
  6. Boone, Jan & Fredriksson, Peter & Holmlund, Bertil & van Ours, Jan, 2001. "Optimal Unemployment Insurance with Monitoring and Sanctions," Working Paper Series 2001:20, Uppsala University, Department of Economics.
  7. Coe, David T & Snower, Dennis J., 1997. "Policy Complementarities: The Case for Fundamental Labour Market Reform," CEPR Discussion Papers 1585, C.E.P.R. Discussion Papers.
  8. Spence, A Michael, 1973. "Job Market Signaling," The Quarterly Journal of Economics, MIT Press, vol. 87(3), pages 355-74, August.
  9. Dolado, Juan J. & Felgueroso, Florentino & Jimeno, Juan F., 2000. "Explaining Youth Labor Market Problems in Spain: Crowding-Out, Institutions, or Technology Shifts?," IZA Discussion Papers 142, Institute for the Study of Labor (IZA).
  10. Wasmer, Etienne, 1999. "Competition for Jobs in a Growing Economy and the Emergence of Dualism," Economic Journal, Royal Economic Society, vol. 109(457), pages 349-71, July.
  11. David H. Autor, 2000. "Why Do Temporary Help Firms Provide Free General Skills Training?," NBER Working Papers 7637, National Bureau of Economic Research, Inc.
  12. Dolado, Juan J. & Felgueroso, Florentino & Jimeno, Juan F., 2000. "Youth labour markets in Spain: Education, training, and crowding-out," European Economic Review, Elsevier, vol. 44(4-6), pages 943-956, May.
  13. Saint-Paul, Gilles, 1995. "A Framework for Analysing the Political Support for Active Labour Market Policy," CEPR Discussion Papers 1205, C.E.P.R. Discussion Papers.
  14. Almus, Matthias & Egeln, Jürgen & Lechner, Michael & Pfeiffer, Friedhelm & Spengler, Hannes, 1998. "Die gemeinnützige Arbeitnehmerüberlassung in Rheinland-Pfalz: Eine ökonometrische Analyse des Wiedereingliederungserfolgs," ZEW Discussion Papers 98-36, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  15. P. Diamond, 1980. "Mobility Costs, Frictional Unemployment and Efficiency," Working papers 257, Massachusetts Institute of Technology (MIT), Department of Economics.
  16. Holmlund, Bertil & Linden, Johan, 1993. "Job matching, temporary public employment, and equilibrium unemployment," Journal of Public Economics, Elsevier, vol. 51(3), pages 329-343, July.
  17. Petrongolo, Barbara & Pissarides, Christopher, 2000. "Looking Into The Black Box: A Survey Of The Matching Function," CEPR Discussion Papers 2409, C.E.P.R. Discussion Papers.
  18. Dale T. Mortensen, 1979. "The Matching Process as a Non-Cooperative/Bargaining Game," Discussion Papers 384, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  19. 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.
  20. Burda, Michael C, 1992. " A Note on Firing Costs and Severance Benefits in Equilibrium Unemployment," Scandinavian Journal of Economics, Wiley Blackwell, vol. 94(3), pages 479-89.
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Citations

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Cited by:
  1. David H. Autor & Susan N. Houseman, 2010. "Do Temporary-Help Jobs Improve Labor Market Outcomes for Low-Skilled Workers? Evidence from "Work First"," American Economic Journal: Applied Economics, American Economic Association, vol. 2(3), pages 96-128, July.
  2. Kyyrä, Tomi & Parrotta, Pierpaolo & Rosholm, Michael, 2009. "The Effect of Receiving Supplementary UI Benefits on Unemployment Duration," Working Papers 09-1, University of Aarhus, Aarhus School of Business, Department of Economics.
  3. Smirnykh, Larisa, 2005. "Labor leasing: economic theory, EU and Russia experience," MPRA Paper 21568, University Library of Munich, Germany.
  4. Michael Kvasnicka, 2003. "Inside the Black Box of Temporary Help Agencies," Labor and Demography 0311001, EconWPA.
  5. repec:hal:journl:halshs-00113476 is not listed on IDEAS
  6. Etienne Campens & Solenne Tanguy, 2006. "The market for job placement : a model of headhunters," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00113476, HAL.
  7. Catalina Amuedo-Dorantes & Miguel Malo & Fernando Muñoz-Bullón, 2008. "The Role of Temporary Help Agency Employment on Temp-to-Perm Transitions," Journal of Labor Research, Springer, vol. 29(2), pages 138-161, June.

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