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Reassessing the Wage Penalty for Temps in Germany

Author

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  • Jahn, Elke J.

    (University of Bayreuth)

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.

Suggested Citation

  • Jahn, Elke J., 2008. "Reassessing the Wage Penalty for Temps in Germany," IZA Discussion Papers 3663, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp3663
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    References listed on IDEAS

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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," IAB-Discussion Paper 201009, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    2. Joakim Hveem, 2013. "Are temporary work agencies stepping stones into regular employment?," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-27, December.
    3. Jahn, Elke & Weber, Enzo, 2016. "Identifying The Substitution Effect Of Temporary Agency Employment," Macroeconomic Dynamics, Cambridge University Press, vol. 20(5), pages 1264-1281, July.
    4. Eichhorst, Werner & Tobsch, Verena, 2013. "Has Atypical Work Become Typical in Germany?," IZA Discussion Papers 7609, Institute of Labor Economics (IZA).
    5. Bogai, Dieter & Wesling, Mirko & Partmann, Michael, 2009. "Zeitarbeit in Berlin-Brandenburg," IAB-Regional. Berichte und Analysen aus dem Regionalen Forschungsnetz. IAB Berlin-Brandenburg 200903, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    6. Smirnykh, Larisa & Wörgötter, Andreas, 2013. "Why Do Russian Firms Use Fixed-Term and Agency Work Contracts?," IZA Policy Papers 54, Institute of Labor Economics (IZA).
    7. Florian Baumann & Mario Mechtel & Nikolai Stähler, 2011. "Employment Protection and Temporary Work Agencies," LABOUR, CEIS, vol. 25(3), pages 308-329, September.
    8. Eichhorst, Werner. & Tobsch, Verena., 2013. "Has atypical work become typical in Germany? : country case studies on labour market segmentation," ILO Working Papers 994814963402676, International Labour Organization.
    9. Andrea F. Presbitero & Matteo G. Richiardi & Alessia A. Amighini, 2015. "Is labor flexibility a substitute to offshoring? Evidence from Italian manufacturing," International Economics, CEPII research center, issue 142, pages 81-93.
    10. 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].
    11. Giulio Bosio, 2014. "The Implications of Temporary Jobs on the Distribution of Wages in Italy: An Unconditional IVQTE Approach," LABOUR, CEIS, vol. 28(1), pages 64-86, March.
    12. Elke J. Jahn & Jan Bentzen, 2012. "What Drives the Demand for Temporary Agency Workers?," LABOUR, CEIS, vol. 26(3), pages 341-355, September.
    13. Carola Grün & Helmut Mahringer & Thomas Rhein, 2010. "Low-wage Jobs: A Means for Employment Integration of the Unemployed? Evidence from Administrative Data in Germany and Austria," WIFO Working Papers 383, WIFO.
    14. Andersson Joona, Pernilla & Wadensjö, Eskil, 2012. "A Price for Flexibility? The Temp Agency Wage Gap in Sweden 1998-2008," IZA Discussion Papers 6587, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    temporary agency employment; wage differential; earnings; Germany; reform;
    All these keywords.

    JEL classification:

    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets

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