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Temporary Agency Work in Portugal, 1995–2000

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Author Info
René Böheim () (Johannes Kepler University Linz, WIFO and IZA)
Ana Rute Cardoso () (IZA)

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Abstract

There is widespread belief that workers in temporary agency work (TAW) are subject to poorer working conditions, in particular pay, than comparable workers in the rest of the economy. The first aim of this analysis is to quantify the wage penalty, if any, for workers in TAW. Secondly, we analyze the wage profile of workers before and after spells of TAW. Linked employer-employee data for Portugal enable us to account for observable as well as unobservable worker quality. Our results show that workers in TAW earn lower wages than their peers and that this difference is mostly due to the workers' characteristics. We estimate that workers in TAW earn on average 9% less than comparable workers in the rest of the economy if we control for the workers' observable attributes only; this difference is reduced to 1% when we control for unobservable characteristics as well. However, interesting differences emerge across groups. Younger workers, both men and women, earn higher wages in TAW than their peers in other firms, as opposed to prime-age and older workers. Moreover, for young workers TAW is not associated with a stigma effect that slows wage progression after working for TAW, contrary to prime-age and older workers, in particular males. The wage trends are also different before entering TAW. Prime-age and older workers see their wages deteriorate relative to their peers before entering TAW, suggesting that adverse labor market conditions may motivate them to search for a TAW job. We do not detect any pre-TAW wage trend for young workers.

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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3144.

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Length: 36 pages
Date of creation: Nov 2007
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Handle: RePEc:iza:izadps:dp3144

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Related research
Keywords: temporary work agencies; temporary help service; matched employer-employee data; Portuguese labor market;

Other versions of this item:

Find related papers by JEL classification:
D21 - Microeconomics - - Production and Organizations - - - Firm Behavior
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
J40 - Labor and Demographic Economics - - Particular Labor Markets - - - General

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Alison L. Booth & Marco Francesconi & Jeff Frank, 2002. "Temporary Jobs: Stepping Stones Or Dead Ends?," Economic Journal, Royal Economic Society, vol. 112(480), pages F189-F213, June. [Downloadable!] (restricted)
    Other versions:
  2. Michael Kvasnicka, 2005. "Does Temporary Agency Work Provide a Stepping Stone to Regular Employment?," Labor and Demography 0510005, EconWPA. [Downloadable!]
    Other versions:
  3. Chris Forde & Gary Slater, 2005. "Agency Working in Britain: Character, Consequences and Regulation," British Journal of Industrial Relations, Blackwell Publishers Ltd/London School of Economics, vol. 43(2), pages 249-271, 06. [Downloadable!] (restricted)
    Other versions:
  4. David Autor & Susan Houseman, 2005. "Do Temporary Help Jobs Improve Labor Market Outcomes
    for Low-Skilled Workers? Evidence from Random Assignments    ," Staff Working Papers 05-124, W.E. Upjohn Institute for Employment Research. [Downloadable!] (restricted)
  5. Catalina Amuedo-Dorantes & Miguel A. Malo & Fernando Muñoz-Bullón, 2006. "The Role of Temporary Help Agencies in Facilitating Temp-to-Perm Transitions," IZA Discussion Papers 2177, Institute for the Study of Labor (IZA). [Downloadable!]
  6. Segal, Lewis M & Sullivan, Daniel G, 1997. "The Growth of Temporary Services Work," Journal of Economic Perspectives, American Economic Association, vol. 11(2), pages 117-36, Spring. [Downloadable!] (restricted)
  7. Manfred Antoni & Elke J. Jahn, 2006. "Do Changes in Regulation Affect Employment Duration in Temporary Work Agencies?," IZA Discussion Papers 2343, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  8. Susan N. Houseman, 2001. "Why employers use flexible staffing arrangements: Evidence from an establishment survey," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 55(1), pages 149-170, October.
  9. Carolyn J. Heinrich & Peter R. Mueser & Kenneth R. Troske, 2005. "Welfare to Temporary Work: Implications for Labor Market Outcomes," The Review of Economics and Statistics, MIT Press, vol. 87(1), pages 154-173, December. [Downloadable!] (restricted)
    Other versions:
  10. 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. [Downloadable!] (restricted)
    Other versions:
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