This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

Outsourcing at Will: Unjust Dismissal Doctrine and the Growth of Temporary Help Employment

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
David H. Autor

Additional information is available for the following registered author(s):

Abstract

The U.S. temporary help services (THS) industry grew at 11 percent annually between 1979 and 1995, five times more rapidly than non-farm employment. Contemporaneously, courts in 46 states adopted exceptions to the common law doctrine of employment at will that limit employers' discretion to terminate workers and opened them to litigation. This paper assesses whether the decline of employment at will and the growth of THS are causally related. To aid the analysis, the paper considers a simple model of employment outsourcing, the primary implication of which is that firms will respond to externally imposed firing costs by outsourcing positions requiring the least firm-specific skills rather than those with the highest expected termination costs. The empirical analysis indicates that one class of exception, the implied contractual right to ongoing employment, led to 14-22 percent excess temporary help growth in adopting states. Unjust dismissal doctrines did not significantly contribute to employment growth in other business service industries. Temporary help employment is closely correlated with union penetration, with states experiencing the least rapid decline in unionization undergoing substantially faster THS growth. The decline of employment at will explains as much as 20 percent of the growth of THS between 1973 and 1995 and accounts for 336,000 to 494,000 additional workers employed in THS on a daily basis as of 1999.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help file. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.jcpr.org/wp/wpdownload.cfm?pdflink=wpfiles/EAWFebJCPR.pdf
Our checks indicate that this address may not be valid because: 404 Not Found. If this is indeed the case, please notify (Thomas Krichel)
File Format: application/pdf
File Function:
Download Restriction: no

Publisher Info
Paper provided by Northwestern University/University of Chicago Joint Center for Poverty Research in its series JCPR Working Papers with number 153.

Download reference. The following formats are available: HTML, plain text, BibTeX, RIS (EndNote), ReDIF
Length:
Date of creation: 08 Feb 2000
Date of revision:
Handle: RePEc:wop:jopovw:153

Contact details of provider:
Postal: Harris Graduate School of Public Policy Studies, 1155 E. 60th Street Chicago, IL 60637
Phone: 773-702-0472
Email:
Web page: http://www.jcpr.org/wp/ByDate.html
More information through EDIRC

For technical questions regarding this item, or to correct its listing, contact: (Thomas Krichel).

Related research
Keywords:

Other versions of this item:

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. Lazear, Edward P, 1990. "Job Security Provisions and Employment," The Quarterly Journal of Economics, MIT Press, vol. 105(3), pages 699-726, August. [Downloadable!] (restricted)
  2. Prendergast, Canice, 1993. "The Role of Promotion in Inducing Specific Human Capital Acquisition," The Quarterly Journal of Economics, MIT Press, vol. 108(2), pages 523-34, May. [Downloadable!] (restricted)
  3. Daron Acemoglu & Joshua Angrist, 1998. "Consequences of Employment Protection? The Case of the Americans with Disabilities Act," Working papers 98-13, Massachusetts Institute of Technology (MIT), Department of Economics.
    Other versions:
  4. Di Tella, Rafael & MacCulloch, Robert, 2005. "The consequences of labor market flexibility: Panel evidence based on survey data," European Economic Review, Elsevier, vol. 49(5), pages 1225-1259, July. [Downloadable!] (restricted)
  5. Marcello Estevao & Saul Lach, 1999. "Measuring Temporary Labor Outsourcing in U.S. Manufacturing," NBER Working Papers 7421, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  6. Hart, Oliver & Moore, John, 1990. "Property Rights and the Nature of the Firm," Journal of Political Economy, University of Chicago Press, vol. 98(6), pages 1119-58, December. [Downloadable!] (restricted)
    Other versions:
  7. Susan N. Houseman & Anne E. Polivka, 1999. "The Implications of Flexible Staffing Arrangements for Job Stability," Staff Working Papers 99-56, W.E. Upjohn Institute for Employment Research. [Downloadable!] (restricted)
  8. Paul Oyer & Scott Schaefer, 2002. "Litigation Costs and Returns to Experience," American Economic Review, American Economic Association, vol. 92(3), pages 683-705, June. [Downloadable!] (restricted)
  9. John J. Donohue III & James Heckman, 1991. "Continuous Versus Episodic Change: The Impact of Civil Rights Policy on the Economic Status of Blacks," NBER Working Papers 3894, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  10. Aghion, Philippe & Hermalin, Benjamin, 1990. "Legal Restrictions on Private Contracts Can Enhance Efficiency," Journal of Law, Economics and Organization, Oxford University Press, vol. 6(2), pages 381-409, Fall.
    Other versions:
  11. Lewis M. Segal & Daniel G. Sullivan, 1998. "Wage differentials for temporary services work: evidence from administrative data," Working Paper Series WP-98-23, Federal Reserve Bank of Chicago. [Downloadable!]
  12. Prendergast, Canice, 1992. "Career development and specific human capital collection," Journal of the Japanese and International Economies, Elsevier, vol. 6(3), pages 207-227, September. [Downloadable!] (restricted)
  13. 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)
  14. Levine, David I, 1991. "Just-Cause Employment Policies in the Presence of Worker Adverse Selection," Journal of Labor Economics, University of Chicago Press, vol. 9(3), pages 294-305, July. [Downloadable!] (restricted)
  15. Lewis M. Segal & Daniel G. Sullivan, 1997. "Temporary services employment durations: evidence from state UI data," Working Paper Series, Macroeconomic Issues WP-97-23, Federal Reserve Bank of Chicago.
  16. 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. [Downloadable!] (restricted)
    Other versions:
  17. Lewis M. Segal & Daniel G. Sullivan, 1995. "The temporary labor force," Economic Perspectives, Federal Reserve Bank of Chicago, issue Mar, pages 2-19.
  18. Paul Oyer & Scott Schaefer, . "Layoffs and Litigation," IPR working papers 98-34, Institute for Policy Resarch at Northwestern University.
    Other versions:
  19. 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, ILR School, Cornell University, vol. 38(4), pages 599-611, July.
  20. 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. Daniel S. Hamermesh, 2000. "12 Million Salaried Workers Are Missing," NBER Working Papers 8016, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  2. 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. [Downloadable!]
  3. Michael Kvasnicka & Axel Werwatz, 2003. "On the Wages of Temporary Help Service Workers in Germany," Labor and Demography 0309004, EconWPA. [Downloadable!]
  4. David H. Autor, 2000. "Why Do Temporary Help Firms Provide Free General Skills Training?," NBER Working Papers 7637, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  5. Daniel, Kirsten & Siebert, W. Stanley, 2004. "Does Employment Protection Reduce the Demand for Unskilled Labor?," IZA Discussion Papers 1290, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  6. Elisabetta Magnani, 2006. "Technological diffusion, the diffusion of skill and the growth of outsourcing in US manufacturing," Economics of Innovation and New Technology, Taylor and Francis Journals, vol. 15(7), pages 617-647, October. [Downloadable!] (restricted)
  7. John S. Heywood & W. Stanley Siebert & Xiangdong Wei, 2006. "Examining the Determinants of Agency Work: Do Family Friendly Practices Play a Role?," IZA Discussion Papers 2413, Institute for the Study of Labor (IZA). [Downloadable!]
  8. Ann Bartel & Saul Lach & Nachum Sicherman, 2005. "Outsourcing and Technological Change," NBER Working Papers 11158, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  9. Antoni, Manfred & Jahn, Elke J., 2006. "Do changes in regulation affect employment duration in temporary work agencies?," IAB Discussion Paper 200618, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]. [Downloadable!]
    Other versions:
  10. Tommaso Nannicini, 2004. "Temporary Workers: How Temporary Are They?," Economics Working Papers ECO2004/23, European University Institute. [Downloadable!]
  11. Yukako Ono & Alexei Zelenev, 2003. "Temporary help services and the volatility of industry output," Economic Perspectives, Federal Reserve Bank of Chicago, issue Q II, pages 15-28. [Downloadable!]
  12. Catalina Amuedo-Dorantes, 2005. "Work Contracts and Earnings Inequality: The Case of Chile," The Journal of Development Studies, Taylor and Francis Journals, vol. 41(4), pages 589-616, May. [Downloadable!] (restricted)
  13. Susan N. Houseman, 2000. "Why Employers Use Flexible Staffing Arrangements: Evidence from an Establishment Survey," Staff Working Papers 01-67, W.E. Upjohn Institute for Employment Research. [Downloadable!] (restricted)
  14. David H. Autor, 2001. "Wiring the Labor Market," Journal of Economic Perspectives, American Economic Association, vol. 15(1), pages 25-40, Winter. [Downloadable!] (restricted)
    Other versions:
  15. Andersson, Pernilla & Wadensjö, Eskil, 2004. "Other Forms of Employment: Temporary Employment Agencies and Self-Employment," IZA Discussion Papers 1166, Institute for the Study of Labor (IZA). [Downloadable!]
  16. Susan N. Houseman & Arne L. Kalleberg & George A. Erickcek, 2001. "The Role of Temporary Help Employment in Tight Labor Markets," Staff Working Papers 01-73, W.E. Upjohn Institute for Employment Research. [Downloadable!] (restricted)
  17. 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!]
  18. 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!]
  19. Adriana Kugler, 2004. "The Effect of Job Security Regulations on Labor Market Flexibility: Evidence from the Colombian Labor Market Reform," NBER Working Papers 10215, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
Statistics
Access and download statistics

Did you know? RePEc also has a blog.

This page was last updated on 2008-7-9.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.