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What Drives the Demand for Temporary Agency Workers?

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  • Jahn, Elke J.

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

  • Bentzen, Jan

    ()
    (Aarhus School of Business)

Abstract

Temporary agency employment has grown steadily in most European countries over the past three decades as part of the general trend towards increased employment flexibility. Yet to this day, it remains an open question what drives the demand for temporary agency workers. The paper examines, first, whether the deregulation of temporary agency employment is responsible for the growth of the flexible staffing industry. Second, we investigate the cyclical behavior of temporary agency employment. Using monthly data for Germany covering the period 1973-2008, we show that the continuous liberalization of this sector is not responsible for the surge in temporary agency employment. Our analysis reveals, moreover, that temporary agency employment exhibits strong cyclical behavior and correlates with main economic indicators in real time. Since most European countries promoted the use of temporary agency employment in a similar way, we believe that our results may be interesting from an international perspective as well.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 5333.

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Date of creation: Nov 2010
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Publication status: published in: LABOUR, 2012, 26 (3), 341-355
Handle: RePEc:iza:izadps:dp5333

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Keywords: labor law; temporary agency employment; business cycle; regulation;

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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?," Discussion Papers 44, Friedrich-Alexander-University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
  2. Jushan Bai & Pierre Perron, 2003. "Computation and analysis of multiple structural change models," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 18(1), pages 1-22.
  3. Michael C. Burda & Michael Kvasnicka, 2005. "Zeitarbeit in Deutschland: Trends und Perspektiven," SFB 649 Discussion Papers SFB649DP2005-048, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
  4. Boockmann, Bernhard & Hagen, Tobias, 2001. "The use of flexible working contracts in West Germany: evidence from an establishment panel," ZEW Discussion Papers 01-33, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  5. Michael Neugart & Donald Storrie, 2006. "The emergence of temporary work agencies," Oxford Economic Papers, Oxford University Press, vol. 58(1), pages 137-156, January.
  6. Manfred Antoni & Elke J. Jahn, 2009. "Do Changes in Regulation Affect Employment Duration in Temporary Help Agencies?," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 62(2), pages 226-251, January.
  7. Susan N. Houseman & Arne L. Kalleberg & George A. Erickcek, 2001. "The Role of Temporary Help Employment in Tight Labor Markets," Upjohn Working Papers and Journal Articles 01-73, W.E. Upjohn Institute for Employment Research.
  8. Jahn, Elke J., 2008. "Reassessing the Wage Penalty for Temps in Germany," IZA Discussion Papers 3663, Institute for the Study of Labor (IZA).
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Cited by:
  1. Larisa Smirnykh & Andreas Wörgötter, 2013. "Why do Russian Firms Use Fixed-Term and Agency Work Contracts?," OECD Economics Department Working Papers 1014, OECD Publishing.
  2. 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).
  3. Jahn, Elke J. & Pozzoli, Dario, 2013. "The pay gap of temporary agency workers — Does the temp sector experience pay off?," Labour Economics, Elsevier, vol. 24(C), pages 48-57.

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