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Do Temporary Help Jobs Improve Labor Market Outcomes
for Low-Skilled Workers? Evidence from Random Assignments

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Author Info
David Autor () (MIT and NBER)
Susan Houseman () (W.E. Upjohn Institute for Employment Research)

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Abstract

A disproportionate share of low-skilled U.S. workers is employed by temporary help firms. These firms offer rapid entry into paid employment, but temporary help jobs are typically brief and it is unknown whether they foster longer-term employment. We draw upon an unusual, large-scale policy experiment in the state of Michigan to evaluate whether holding temporary help jobs facilitates labor market advancement for low-skilled workers. To identify these effects, we exploit the random assignment of welfare-to-work clients across numerous welfare service providers in a major metropolitan area. These providers feature substantially different placement rates at temporary help jobs but offer otherwise similar services. We find that moving welfare participants into temporary help jobs boosts their short-term earnings. But these gains are offset by lower earnings, less frequent employment, and potentially higher welfare recidivism over the next one to two years. In contrast, placements in direct-hire jobs raise participants' earnings substantially and reduce recidivism both one and two years following placement. We conclude that encouraging low-skilled workers to take temporary help agency jobs is no more effective - and possibly less effective - than providing no job placements at all.

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Publisher Info
Paper provided by W.E. Upjohn Institute for Employment Research in its series Staff Working Papers with number 05-124.

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Date of creation: Oct 2005
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Handle: RePEc:upj:weupjo:05-12

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Related research
Keywords: temporary agency; poverty; welfare; welfare-to-work; autor; houseman;

Other versions of this item:

Find related papers by JEL classification:
I38 - Health, Education, and Welfare - - Welfare and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
J40 - Labor and Demographic Economics - - Particular Labor Markets - - - General

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. 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. [Downloadable!] (restricted)
    Other versions:
  2. Jeffrey R Kling & Jeffrey B Liebman & Lawrence F Katz, 2007. "Experimental Analysis of Neighborhood Effects," Econometrica, Econometric Society, vol. 75(1), pages 83-119, 01. [Downloadable!] (restricted)
    Other versions:
  3. Michael Kvasnicka, 2005. "Does Temporary Agency Work Provide a Stepping Stone to Regular Employment?," Labor and Demography 0510005, EconWPA. [Downloadable!]
    Other versions:
  4. King, Jeffrey & Liebman, Jeffrey & Katz, Lawrence & Sanbonmatsu, Lisa, 2004. "Moving to Opportunity and Tranquility: Neighborhood Effects on Adult Economic Self-Sufficiency and Health from a Randomized Housing Voucher Experiment," Working Paper Series rwp04-035, Harvard University, John F. Kennedy School of Government. [Downloadable!]
    Other versions:
  5. Andersson, Pernilla & Wadensjö, Eskil, 2004. "Temporary Employment Agencies: A Route for Immigrants to Enter the Labour Market?," IZA Discussion Papers 1090, Institute for the Study of Labor (IZA). [Downloadable!]
  6. Kling, Jeffrey & Liebman, Jeffrey, 2004. "Experimental Analysis of Neighborhood Effects on Youth," Working Paper Series rwp04-034, Harvard University, John F. Kennedy School of Government. [Downloadable!]
    Other versions:
  7. Andrea Ichino & Fabrizia Mealli & Tommaso Nannicini, 2005. "Temporary Work Agencies in Italy: A Springboard Toward Permanent Employment?," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 64(1), pages 1-27, September. [Downloadable!]
  8. Katharine G. Abraham, 1988. "Flexible Staffing Arrangements and Employers' Short-Term Adjustment Strategies," NBER Working Papers 2617, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  9. David H. Autor, 2003. "Outsourcing at Will: The Contribution of Unjust Dismissal Doctrine to the Growth of Employment Outsourcing," Journal of Labor Economics, University of Chicago Press, vol. 21(1), pages 1-42, January. [Downloadable!]
  10. Neugart, Michael & Storrie, Donald, 2002. "Temporary work agencies and equilibrium unemployment," Working Papers in Economics 83, Göteborg University, Department of Economics. [Downloadable!]
  11. 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). [Downloadable!]
    Other versions:
  12. O Blanchard & A Landier, 2002. "The Perverse Effects of Partial Labour Market Reform: fixed--Term Contracts in France," Economic Journal, Royal Economic Society, vol. 112(480), pages F214-F244, June. [Downloadable!] (restricted)
  13. Imbens, Guido W & Angrist, Joshua D, 1994. "Identification and Estimation of Local Average Treatment Effects," Econometrica, Econometric Society, vol. 62(2), pages 467-75, March. [Downloadable!] (restricted)
    Other versions:
  14. Abadie, Alberto, 2003. "Semiparametric instrumental variable estimation of treatment response models," Journal of Econometrics, Elsevier, vol. 113(2), pages 231-263, April. [Downloadable!] (restricted)
  15. Segal, Lewis M & Sullivan, Daniel G, 1997. "The Growth of Temporary Services Work," Journal of Economic Perspectives, American Economic Association, vol. 11(2), pages 117-36, Spring. [Downloadable!] (restricted)
  16. Michael Gerfin & Michael Lechner & Heidi Steiger, 2002. "Does subsidised temporary employment get the unemployed back to work? An econometric analysis of two different schemes," University of St. Gallen Department of Economics working paper series 2002 2002-22, Department of Economics, University of St. Gallen. [Downloadable!]
    Other versions:
  17. Susan N. Houseman, 2001. "Why employers use flexible staffing arrangements: Evidence from an establishment survey," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 55(1), pages 149-170, October.
  18. David H. Autor, 2001. "Why Do Temporary Help Firms Provide Free General Skills Training?," The Quarterly Journal of Economics, MIT Press, vol. 116(4), pages 1409-1448, November. [Downloadable!] (restricted)
    Other versions:
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. René Böheim & Ana Rute Cardoso, 2007. "Temporary Agency Work in Portugal, 1995–2000," IZA Discussion Papers 3144, Institute for the Study of Labor (IZA). [Downloadable!]
  2. Michael Kvasnicka, 2008. "Does Temporary Help Work Provide a Stepping Stone to Regular Employment?," NBER Working Papers 13843, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  3. David H. Autor, 2008. "The Economics of Labor Market Intermediation: An Analytic Framework," NBER Working Papers 14348, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  4. David Autor & Susan Houseman, 2005. "Temporary Agency Employment as a Way out of Poverty?," Staff Working Papers 05-123, W.E. Upjohn Institute for Employment Research. [Downloadable!] (restricted)
    Other versions:
  5. Jahn, Elke J., 2008. "Reassessing the Wage Penalty for Temps in Germany," IZA Discussion Papers 3663, Institute for the Study of Labor (IZA). [Downloadable!]
  6. Renato Faccini, 2008. "Reassessing Labor Market Reforms: Temporary Contracts as a Screening Device," Economics Working Papers ECO2008/27, European University Institute. [Downloadable!]
  7. repec:ese:iserwp: is not listed on IDEAS
  8. Manfred Antoni & Elke J. Jahn, 2006. "Do Changes in Regulation Affect Employment Duration in Temporary Work Agencies?," IZA Discussion Papers 2343, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  9. Sarah Hamersma & Carolyn Heinrich, 2007. "Temporary Help Service Firms' Use of Employer Tax Credits: Implications for Disadvantaged Workers' Labor Market Outcomes," Staff Working Papers 07-135, W.E. Upjohn Institute for Employment Research. [Downloadable!] (restricted)
  10. Rene Boeheim & Ana Rute Cardoso, 2007. "Temporary Help Services Employment in Portugal, 1995-2000," NBER Working Papers 13582, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  11. Lawrence M. Kahn, 2007. "Employment Protection Reforms, Employment and the Incidence of Temporary Jobs in Europe: 1995-2001," IZA Discussion Papers 3241, Institute for the Study of Labor (IZA). [Downloadable!]
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