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Temporary Help Agencies and the Advancement Prospects of Low Earners

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Author Info

  • Andersson, Fredrik

    ()
    (Lund University)

  • Holzer, Harry J.

    ()
    (Georgetown University)

  • Lane, Julia

    ()
    (American Institutes for Research)

Abstract

In this paper we use a very large matched database on firms and employees to analyze the use of temporary agencies by low earners, and to estimate the impact of temp employment on subsequent employment outcomes for these workers. Our results show that, while temp workers have lower earnings than others while working at these agencies, their subsequent earnings are often higher – but only if they manage to gain stable work with other employers. Furthermore, the positive effects seem mostly to occur because those working for temp agencies subsequently gain access to higher-wage firms than do comparable low earners who do not work for temps. The positive effects we find seem to persist for up to six years beyond the period during which the temp employment occurred.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3113.

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Length: 45 pages
Date of creation: Oct 2007
Date of revision:
Handle: RePEc:iza:izadps:dp3113

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Keywords: temp; employment; advancement; intermediaries;

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References

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  1. David Autor & Susan Houseman, 2005. "Temporary Agency Employment as a Way out of Poverty?," NBER Working Papers 11742, National Bureau of Economic Research, Inc.
  2. John M. Abowd & Francis Kramarz & David N. Margolis, 1994. "High-Wage Workers and High-Wage Firms," CIRANO Working Papers, CIRANO 94s-23, CIRANO.
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  5. John M. Abowd & Robert H. Creecy & Francis Kramarz, 2002. "Computing Person and Firm Effects Using Linked Longitudinal Employer-Employee Data," Longitudinal Employer-Household Dynamics Technical Papers, Center for Economic Studies, U.S. Census Bureau 2002-06, Center for Economic Studies, U.S. Census Bureau.
  6. David H. Autor, 2001. "Why Do Temporary Help Firms Provide Free General Skills Training?," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 116(4), pages 1409-1448, November.
  7. David H. Autor & Susan N. Houseman, . "Do Temporary-Help Jobs Improve Labor Market Outcomes for Low-Skilled Workers? Evidence from "Work First"," Upjohn Working Papers and Journal Articles dhasnh2010, W.E. Upjohn Institute for Employment Research.
  8. Yannis M. Ioannides & Linda Datcher Loury, 2002. "Job Information Networks, Neighborhood Effects and Inequality," Discussion Papers Series, Department of Economics, Tufts University, Department of Economics, Tufts University 0217, Department of Economics, Tufts University.
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  12. Andrea Ichino & Fabrizia Mealli & Tommaso Nannicini, 2008. "From temporary help jobs to permanent employment: what can we learn from matching estimators and their sensitivity?," Journal of Applied Econometrics, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 23(3), pages 305-327.
  13. Daniel Immergluck, 1996. "What employers want: Job prospects for less-educated workers," The Review of Black Political Economy, Springer, Springer, vol. 24(4), pages 135-143, June.
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  15. Harry J. Holzer, 1986. "Informal Job Search and Black Youth Unemployment," NBER Working Papers 1860, National Bureau of Economic Research, Inc.
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  17. Harry J. Holzer & Steven Raphael & Michael A. Stoll, 2006. "Employers in the Boom: How Did the Hiring of Less-Skilled Workers Change during the 1990s?," The Review of Economics and Statistics, MIT Press, vol. 88(2), pages 283-299, May.
  18. Julia Lane & Kelly S. Mikelson & Pat Sharkey & Doug Wissoker, 2003. "Pathways to work for low-income workers: The effect of work in the temporary help industry," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 22(4), pages 581-598.
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  20. Farber, Henry S., 1999. "Mobility and stability: The dynamics of job change in labor markets," Handbook of Labor Economics, Elsevier, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 37, pages 2439-2483 Elsevier.
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Citations

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Cited by:
  1. Jahn, Elke J. & Rosholm, Michael, 2010. "Looking Beyond the Bridge: How Temporary Agency Employment Affects Labor Market Outcomes," IZA Discussion Papers 4973, Institute for the Study of Labor (IZA).
  2. Jahn, Elke J. & Rosholm, Michael, 2014. "Looking beyond the bridge: The effect of temporary agency employment on labor market outcomes," European Economic Review, Elsevier, Elsevier, vol. 65(C), pages 108-125.
  3. Carolyn J. Heinrich & Peter R. Mueser & Kenneth R. Troske, 2009. "The Role of Temporary Help Employment in Low-Wage Worker Advancement," NBER Chapters, in: Studies of Labor Market Intermediation, pages 399-436 National Bureau of Economic Research, Inc.
  4. OKUDAIRA Hiroko & OHTAKE Fumio & KUME Koichi & TSURU Kotaro, 2011. "What Does a Temporary Help Service Job Offer? Empirical suggestions from a Japanese survey," Discussion papers, Research Institute of Economy, Trade and Industry (RIETI) 11077, Research Institute of Economy, Trade and Industry (RIETI).
  5. B. Cockx & M. Picchio, 2009. "Are Short-Lived Jobs Stepping Stones to Long-Lasting Jobs?," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium, Ghent University, Faculty of Economics and Business Administration 09/560, Ghent University, Faculty of Economics and Business Administration.
  6. Andersson Joona, Pernilla & Wadensjö, Eskil, 2012. "A Price for Flexibility? The Temp Agency Wage Gap in Sweden 1998-2008," IZA Discussion Papers 6587, Institute for the Study of Labor (IZA).
  7. 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, Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 230(2), pages 208-233.
  8. Jahn, Elke J., 2008. "Reassessing the Wage Penalty for Temps in Germany," IZA Discussion Papers 3663, Institute for the Study of Labor (IZA).
  9. Jahn, Elke & Pozzoli, Dario, 2011. "Does the Sector Experience Affect the Pay Gap for Temporary Agency Workers?," Working Papers 11-9, University of Aarhus, Aarhus School of Business, Department of Economics.

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