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Reassessing the Wage Penalty for Temps in Germany

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  • Jahn, Elke J.

    ()
    (Institute for Employment Research (IAB), Nuremberg)

Abstract

As a consequence of the rapid growth of temporary agency employment in Germany, the debate on the poor working conditions of temps, specifically their remuneration, has intensified recently. Using administrative data, the paper shows that the wage gap for German temp workers is rather large and varies between occupation and region. But temps already suffer from a marked wage decline before entering the temporary help sector. Nevertheless, temporary agency employment does not leave a long lasting scar. Two years after leaving the sector, temps no longer suffer from a wage penalty. A recent change in the law set a high incentive for temporary help agencies to pay their workers according to a sectoral collective agreement. Surprisingly, the unionization of the sector could not bring the widening wage gap to a halt.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3663.

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Length: 39 pages
Date of creation: Aug 2008
Date of revision:
Publication status: published in: Jahrbücher für Nationalökonomie und Statistik, 2010, 230 (2), 208-233
Handle: RePEc:iza:izadps:dp3663

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Keywords: temporary agency employment; wage differential; earnings; Germany; reform;

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References

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  1. Antoni, Manfred & Jahn, Elke J., 2006. "Do Changes in Regulation Affect Employment Duration in Temporary Work Agencies?," IZA Discussion Papers 2343, Institute for the Study of Labor (IZA).
  2. Michael Kvasnicka, 2005. "Does Temporary Agency Work Provide a Stepping Stone to Regular Employment?," SFB 649 Discussion Papers SFB649DP2005-031, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
  3. Bernd Fitzenberger & Aderonke Osikominu & Robert Völter, 2006. "Imputation Rules to Improve the Education Variable in the IAB Employment Subsample," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 126(3), pages 405-436.
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  5. 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.
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  14. Brücker, Herbert & Jahn, Elke J., 2008. "Migration and the Wage-Settings Curve: Reassessing the Labor Market Effects of Migration," Working Papers 08-4, University of Aarhus, Aarhus School of Business, Department of Economics.
  15. Fredrik Andersson & Harry J. Holzer & Julia Lane, 2009. "Temporary Help Agencies and the Advancement Prospects of Low Earners," NBER Chapters, in: Studies of Labor Market Intermediation, pages 373-398 National Bureau of Economic Research, Inc.
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Citations

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Cited by:
  1. Jahn, Elke J. & Weber, Enzo, 2012. "Identifying the Substitution Effect of Temporary Agency Employment," IZA Discussion Papers 6471, Institute for the Study of Labor (IZA).
  2. Larisa Smirnykh & Andreas Wörgötter, 2013. "Why do Russian Firms Use Fixed-Term and Agency Work Contracts?," OECD Economics Department Working Papers 1014, OECD Publishing.
  3. Elke J. Jahn & Jan Bentzen, 2012. "What Drives the Demand for Temporary Agency Workers?," LABOUR, CEIS, vol. 26(3), pages 341-355, 09.
  4. Grün, Carola & Mahringer, Helmut & Rhein, Thomas, 2011. "Low-wage jobs: a means for employment integration of the unemployed? : evidence from administrative data in Germany and Austria," IAB Discussion Paper 201101, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  5. Jahn, Elke J. & Rosholm, Michael, 2010. "Looking Beyond the Bridge: How Temporary Agency Employment Affects Labor Market Outcomes," Working Papers 10-6, University of Aarhus, Aarhus School of Business, Department of Economics.
  6. Eichhorst, Werner & Tobsch, Verena, 2013. "Has atypical work become typical in Germany? : country case studies on labour market segmentation," ILO Working Papers 481496, International Labour Organization.
  7. Eichhorst, Werner & Tobsch, Verena, 2013. "Has Atypical Work Become Typical in Germany?," IZA Discussion Papers 7609, Institute for the Study of Labor (IZA).
  8. Andrea Filippo Presbitero & Matteo G. Richiardi & Alessia Amighini, 2012. "Is labor flexibility a substitute to offshoring? Evidence from Italian manafacturing," Mo.Fi.R. Working Papers 72, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.
  9. Florian Baumann & Mario Mechtel & Nikolai Stähler, 2011. "Employment Protection and Temporary Work Agencies," LABOUR, CEIS, vol. 25(3), pages 308-329, 09.
  10. 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).

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