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Temporary Help Services Employment in Portugal, 1995-2000

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  • Rene Boeheim
  • Ana Rute Cardoso

Abstract

Whereas there is widespread belief that workers in temporary help services (THS) are subject to poorer working conditions, in particular pay, than comparable workers in the rest of the economy, there is little evidence on whether that is driven by the sector per se or by the workers' characteristics. The first aim of this analysis is to quantify the wage penalty, if any, for workers in THS firms. Secondly, we analyze the wage profile of workers right before and after spells of THS. Linked employer-employee data for Portugal enable us to account for observable as well as unobservable worker quality. Our results show that workers in THS firms earn lower wages than their peers and that this difference is mostly due to the workers' characteristics. We estimate that workers in THS firms 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 about 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, while the opposite holds for prime-age and older workers. Moreover, for young workers THS firms is not associated with a stigma effect that slows their wage progression after they work for THS, as opposed to prime-age and older workers, in particular males. Also before entering THS the wage trends are different. Prime-age and older workers, both male and female, see their wages deteriorate relative to their peers before entering THS, suggesting that adverse labor market conditions may motivate them to search for a THS job. On the contrary, for young workers we do not detect any pre-THS wage trend.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 13582.

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Date of creation: Nov 2007
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Publication status: published as Temporary Help Services Employment in Portugal, 1995-2000 , René Böheim, Ana Rute Cardoso. in Studies of Labor Market Intermediation , Autor. 2009
Handle: RePEc:nbr:nberwo:13582

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References

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  1. Amuedo-Dorantes, Catalina & Malo, Miguel & Muñoz-Bullón, Fernando, 2006. "The Role of Temporary Help Agencies in Facilitating Temp-to-Perm Transitions," IZA Discussion Papers 2177, Institute for the Study of Labor (IZA).
  2. Zijl, Marloes & van den Berg, Gerard J. & Heyma, Arjan, 2004. "Stepping Stones for the Unemployed: The Effect of Temporary Jobs on the Duration until Regular Work," IZA Discussion Papers 1241, Institute for the Study of Labor (IZA).
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  4. 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.
  5. Booth, Alison L. & Francesconi, Marco & Frank, Jeff, 2000. "Temporary Jobs: Stepping Stones or Dead Ends?," IZA Discussion Papers 205, Institute for the Study of Labor (IZA).
  6. Ichino, Andrea & Mealli, Fabrizia & Nannicini, Tommaso, 2006. "From Temporary Help Jobs to Permanent Employment: What Can We Learn from Matching Estimators and their Sensitivity?," CEPR Discussion Papers 5736, C.E.P.R. Discussion Papers.
  7. Chris Forde & Gary Slater, 2005. "Agency Working in Britain: Character, Consequences and Regulation," British Journal of Industrial Relations, London School of Economics, vol. 43(2), pages 249-271, 06.
  8. David Autor & Susan Houseman, 2009. "Do Temporary-Help Jobs Improve Labor Market Outcomes for Low-Skilled Workers? Evidence from 'Work First'," Upjohn Working Papers and Journal Articles 05-124, W.E. Upjohn Institute for Employment Research.
  9. Louis S. Jacobson & Robert J. LaLonde & Daniel Sullivan, 1992. "Earnings Losses of Displaced Workers," Upjohn Working Papers and Journal Articles 92-11, W.E. Upjohn Institute for Employment Research.
  10. Susan N. Houseman, 2001. "Why employers use flexible staffing arrangements: Evidence from an establishment survey," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 55(1), pages 149-170, October.
  11. David H. Autor, 2000. "Why Do Temporary Help Firms Provide Free General Skills Training?," NBER Working Papers 7637, National Bureau of Economic Research, Inc.
  12. Susan N. Houseman, . "Why Employers Use Flexible Staffing Arrangements: Evidence from an Establishment Survey," Upjohn Working Papers and Journal Articles snh2001, W.E. Upjohn Institute for Employment Research.
  13. Lewis Segal & Daniel Sullivan, 1996. "The growth of temporary services work," Working Paper Series, Macroeconomic Issues WP-96-26, Federal Reserve Bank of Chicago.
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  15. 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.
  16. Cardoso, Ana Rute, 2005. "Big Fish in Small Pond or Small Fish in Big Pond? An Analysis of Job Mobility," IZA Discussion Papers 1900, Institute for the Study of Labor (IZA).
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Cited by:
  1. Jahn, Elke J., 2008. "Reassessing the Wage Penalty for Temps in Germany," IZA Discussion Papers 3663, Institute for the Study of Labor (IZA).
  2. 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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