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Why Employers Use Flexible Staffing Arrangements: Evidence from an Establishment Survey

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This paper examines which employers use flexible staffing arrangements, why they use these arrangements, and their implications for workers and public policy, drawing on a nationally representative survey of private sector establishments. Use of flexible staffing arrangements -- including temporary help agency, short-term, on-call, regular part-time, and contract workers -- is widespread and two-thirds of employers believe this use will increase in the near future. Traditional reasons concerning the need to accommodate fluctuations in workload or absences in staff are the most commonly cited reasons for using all types of flexible staffing arrangements. Many employers also use agency temporaries and part- time workers to screen candidates for regular positions. Finally, savings on benefits costs is an important factor determining employers' use of flexible staffing arrangements. Workers in flexible staffing arrangements typically are not covered by regulations governing benefits, and they typically do not receive key benefits, like pension benefits and health insurance, when these benefits are offered to regular full-time workers.

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Paper provided by W.E. Upjohn Institute for Employment Research in its series Upjohn Working Papers and Journal Articles with number 01-67.

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Date of creation: Oct 2000
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Handle: RePEc:upj:weupjo:01-67

Note: A revised version of this paper appears in Industrial and Labor Relations Review, Vol. 55, No. 1 (October 2001), pp. 149-170. Please cite the revised version.
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Keywords: flexible staffing; contingent work; part-time work; Houseman;

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  1. Abraham, Katharine G & Taylor, Susan K, 1996. "Firms' Use of Outside Contractors: Theory and Evidence," Journal of Labor Economics, University of Chicago Press, vol. 14(3), pages 394-424, July.
  2. Alan Krueger, 1989. "The Evolution of Unjust-Dismissal Legislation in the United States," Working Papers 638, Princeton University, Department of Economics, Industrial Relations Section..
  3. Lettau, Michael K., 1997. "Compensation in part-time jobs versus full-time jobs What if the job is the same?," Economics Letters, Elsevier, vol. 56(1), pages 101-106, September.
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  5. Krueger, Alan B & Summers, Lawrence H, 1988. "Efficiency Wages and the Inter-industry Wage Structure," Econometrica, Econometric Society, vol. 56(2), pages 259-93, March.
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  7. Murphy, Kevin M & Topel, Robert H, 2002. "Estimation and Inference in Two-Step Econometric Models," Journal of Business & Economic Statistics, American Statistical Association, vol. 20(1), pages 88-97, January.
  8. John P. Haisken-DeNew & Christoph M. Schmidt, . "Inter-Industry and Inter-Region Differentials: Mechanics and Interpretation," Working Papers 9504, SELAPO Center for Human Resources.
  9. Lewis Segal & Daniel Sullivan, 1996. "The growth of temporary services work," Working Paper Series, Macroeconomic Issues WP-96-26, Federal Reserve Bank of Chicago.
  10. Garth L. Mangum & Donald Mayall & Kristin Nelson, 1985. "The temporary help industry: A response to the dual internal labor market," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 38(4), pages 599-611, July.
  11. Katharine G. Abraham, 1988. "Flexible Staffing Arrangements and Employers' Short-Term Adjustment Strategies," NBER Working Papers 2617, National Bureau of Economic Research, Inc.
  12. Susan N. Houseman & Anne E. Polivka, 1999. "The Implications of Flexible Staffing Arrangements for Job Stability," Upjohn Working Papers and Journal Articles 99-56, W.E. Upjohn Institute for Employment Research.
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