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The Role of Temporary Help Employment in Low-wage Worker Advancement

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Abstract

We examine the effects of temporary help service employment on later earnings and employment for individuals participating in three federal programs providing supportive services to those facing employment difficulties. The programs include Temporary Assistance for Needy Families, whose participants are seriously disadvantaged; a job training program with a highly heterogeneous population of participants; and employment exchange services, whose participants consist of Unemployment Insurance claimants and individuals seeking assistant in obtaining employment. We undertake our analyses for two periods: the late 1990s, a time of very strong economic growth, and shortly after 2000, a time of relative stagnation. Our results suggest that temporary help service firms may facilitate quicker access to jobs for those seeking employment assistance and impart substantial benefits as transitional employment, especially for individuals whose alternatives are severely limited. Those who do not move out of temporary help jobs, however, face substantially poorer prospects, and we observe that nonwhites are more likely than whites to remain in THS positions in the two years following program participation. Our results are robust to program and time period.

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Bibliographic Info

Paper provided by Department of Economics, University of Missouri in its series Working Papers with number 0719.

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Length: 87 pages
Date of creation: 15 Oct 2007
Date of revision:
Publication status: Forthcoming in Review of Economic and Statistics
Handle: RePEc:umc:wpaper:0719

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Keywords: temporary help; mediated employment; program evaluation;

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References

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  1. V. Joseph Hotz & Guido W. Imbens & Jacob A. Klerman, 2006. "Evaluating the Differential Effects of Alternative Welfare-to-Work Training Components: A Re-Analysis of the California GAIN Program," NBER Working Papers 11939, National Bureau of Economic Research, Inc.
  2. David H. Autor & Susan N. Houseman, 2010. "Do Temporary-Help Jobs Improve Labor Market Outcomes for Low-Skilled Workers? Evidence from "Work First"," American Economic Journal: Applied Economics, American Economic Association, vol. 2(3), pages 96-128, July.
  3. 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.
  4. Alison L. Booth & Marco Francesconi & Jeff Frank, 2002. "Temporary Jobs: Stepping Stones Or Dead Ends?," Economic Journal, Royal Economic Society, vol. 112(480), pages F189-F213, June.
  5. Heckman, James J. & Lalonde, Robert J. & Smith, Jeffrey A., 1999. "The economics and econometrics of active labor market programs," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 31, pages 1865-2097 Elsevier.
  6. 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.
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  8. Susan N. Houseman & Arne L. Kalleberg & George A. Erickcek, . "The Role of Temporary Agency Employment in Tight Labor Markets," Upjohn Working Papers and Journal Articles snhakge2003, W.E. Upjohn Institute for Employment Research.
  9. J. Ignacio García-Pérez & Fernando Muñoz-Bullón, 2005. "Temporary Help Agencies and Occupational Mobility," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 67(2), pages 163-180, 04.
  10. William E. Even & David A. Macpherson, 2004. "The Wage and Employment Dynamics of Minimum Wage Workers," Labor and Demography 0404007, EconWPA.
  11. Susan N. Houseman & Arne L. Kalleberg & George A. Erickcek, 2003. "The role of temporary agency employment in tight labor markets," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 57(1), pages 105-127, October.
  12. Peter R. Mueser & Kenneth R. Troske & Carolyn J. Heinrich, 2007. "The Role of Temporary Help Employment in Low-wage Worker Advancement," Working Papers 0719, Department of Economics, University of Missouri.
  13. 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).
  14. Ashenfelter, Orley & Card, David, 1985. "Using the Longitudinal Structure of Earnings to Estimate the Effect of Training Programs," The Review of Economics and Statistics, MIT Press, vol. 67(4), pages 648-60, November.
  15. Lewis Segal & Daniel Sullivan, 1996. "The growth of temporary services work," Working Paper Series, Macroeconomic Issues WP-96-26, Federal Reserve Bank of Chicago.
  16. Dyke, Andrew & Heinrich, Carolyn J. & Mueser, Peter R. & Troske, Kenneth, 2005. "The Effects of Welfare-to-Work Program Activities on Labor Market Outcomes," IZA Discussion Papers 1520, Institute for the Study of Labor (IZA).
  17. Carolyn J. Heinrich & Peter R. Mueser & Kenneth R. Troske, 2005. "Welfare to Temporary Work: Implications for Labor Market Outcomes," The Review of Economics and Statistics, MIT Press, vol. 87(1), pages 154-173, February.
  18. Joseph G. Altonji & Todd E. Elder & Christopher R. Taber, 2005. "Selection on Observed and Unobserved Variables: Assessing the Effectiveness of Catholic Schools," Journal of Political Economy, University of Chicago Press, vol. 113(1), pages 151-184, February.
  19. Julia Lane & Kelly S. Mikelson & Pat Sharkey & Doug Wissoker, 2003. "Pathways to work for low-income workers: The effect of work in the temporary help industry," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 22(4), pages 581-598.
  20. Carolyn J. Heinrich, 2005. "Temporary Employment Experiences of Women on Welfare," Journal of Labor Research, Transaction Publishers, vol. 26(2), pages 335-350, January.
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Citations

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Cited by:
  1. Christopher L. House & Jing Zhang, 2012. "Layoffs, Lemons and Temps," NBER Working Papers 17962, National Bureau of Economic Research, Inc.
  2. Okudaira, Hiroko & Ohtake, Fumio & Kume, Koichi & Tsuru, Kotaro, 2013. "What does a temporary help service job offer? Empirical suggestions from a Japanese survey," Journal of the Japanese and International Economies, Elsevier, vol. 28(C), pages 37-68.
  3. Peter R. Mueser & Kenneth R. Troske & Carolyn J. Heinrich, 2007. "The Role of Temporary Help Employment in Low-wage Worker Advancement," Working Papers 0719, Department of Economics, University of Missouri.
  4. Cockx, Bart & Picchio, Matteo, 2009. "Are Short-Lived Jobs Stepping Stones to Long-Lasting Jobs?," IZA Discussion Papers 4007, Institute for the Study of Labor (IZA).
  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. Bruno, Giovanni S. F. & Caroleo, Floro Ernesto & Dessy, Orietta, 2012. "Stepping Stones versus Dead End Jobs: Exits from Temporary Contracts in Italy after the 2003 Reform," IZA Discussion Papers 6746, 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," IZA Discussion Papers 4973, Institute for the Study of Labor (IZA).
  8. Hinrichs, Peter, 2011. "The effects of attending a diverse college," Economics of Education Review, Elsevier, vol. 30(2), pages 332-341, April.
  9. Eichhorst, Werner & Kendzia, Michael J. & al., et, 2013. "Report No. 57: The Role and Activities of Employment Agencies," IZA Research Reports 57, Institute for the Study of Labor (IZA).
  10. Jahn, Elke J. & Rosholm, Michael, 2014. "Looking beyond the bridge: The effect of temporary agency employment on labor market outcomes," European Economic Review, Elsevier, vol. 65(C), pages 108-125.

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