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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. Andersson, Fredrik & Holzer, Harry J. & Lane, Julia, 2007. "Temporary Help Agencies and the Advancement Prospects of Low Earners," IZA Discussion Papers 3113, Institute for the Study of Labor (IZA).
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Citations

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Cited by:
  1. Jahn, Elke & Weber, Enzo, 2012. "Identifying the Substitution Effect of Temporary Agency Employment," University of Regensburg Working Papers in Business, Economics and Management Information Systems 463, University of Regensburg, Department of Economics.
  2. Baumann, Florian & Mechtel, Mario & Stähler, Nikolai, 2008. "Employment protection and temporary work agencies," Discussion Paper Series 1: Economic Studies 2008,26, Deutsche Bundesbank, Research Centre.
  3. 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].
  4. Werner Eichhorst & Verena Tobsch, 2013. "Has Atypical Work Become Typical in Germany?: Country Case Studies on Labour Market Segmentation," SOEPpapers on Multidisciplinary Panel Data Research 596, DIW Berlin, The German Socio-Economic Panel (SOEP).
  5. 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).
  6. Jahn, Elke J. & Bentzen, Jan, 2010. "What Drives the Demand for Temporary Agency Workers?," IZA Discussion Papers 5333, Institute for the Study of Labor (IZA).
  7. 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].
  8. Smirnykh, Larisa & Wörgötter, Andreas, 2013. "Why Do Russian Firms Use Fixed-Term and Agency Work Contracts?," IZA Policy Papers 54, Institute for the Study of Labor (IZA).
  9. Eichhorst, Werner & Tobsch, Verena, 2013. "Has Atypical Work Become Typical in Germany?," IZA Discussion Papers 7609, Institute for the Study of Labor (IZA).
  10. Andrea F. Presbitero & Matteo G. Richiardi & Alessia Amighini, 2012. "Is labor flexibility a substitute to offshoring? Evidence from Italian manafacturing," LABORatorio R. Revelli Working Papers Series 122, LABORatorio R. Revelli, Centre for Employment Studies.

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