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Employment protection and temporary work agencies

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Author Info
Baumann, Florian
Mechtel, Mario
Stähler, Nikolai

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Abstract

Employers who use temporary agency staff in contrast to regular staff are not affected by employment protection regulations when terminating a job. Therefore, services provided by temporary work agencies may be seen as a substitute for regular employment. In this paper, we analyze the effects of employment protection on the size of the temporary work agency sector in a model of equilibrium unemployment. We find that higher firing costs may even reduce temporary work agency employment if agencies themselves are subject to employment protection, a consideration which distinguishes our results from those for fixed-term employment arrangements. --

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Publisher Info
Paper provided by Deutsche Bundesbank, Research Centre in its series Discussion Paper Series 1: Economic Studies with number 2008,26.

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Date of creation: 2008
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Handle: RePEc:zbw:bubdp1:7565

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Related research
Keywords: employment protection; temporary work agencies; search and matching models; unemployment;

Find related papers by JEL classification:
J68 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Public Policy
J65 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Unemployment Insurance; Severance Pay; Plant Closings
J64 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Unemployment: Models, Duration, Incidence, and Job Search
J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General

References listed on IDEAS
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  1. Cahuc, Pierre & Postel-Vinay, Fabien, 2002. "Temporary jobs, employment protection and labor market performance," Labour Economics, Elsevier, vol. 9(1), pages 63-91, February. [Downloadable!] (restricted)
  2. 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)
  3. Luca Nunziata & Stefano Staffolani, 2007. "Short-Term Contracts Regulations And Dynamic Labour Demand: Theory And Evidence," Scottish Journal of Political Economy, Scottish Economic Society, vol. 54(1), pages 72-104, 02. [Downloadable!] (restricted)
  4. Pietro Garibaldi & Giovanni L. Violante, 2005. "The Employment Effects of Severance Payments with Wage Rigidities," Economic Journal, Royal Economic Society, vol. 115(506), pages 799-832, October. [Downloadable!] (restricted)
    Other versions:
  5. Miles, Thomas J, 2000. "Common Law Exceptions to Employment at Will and U.S. Labor Markets," Journal of Law, Economics and Organization, Oxford University Press, vol. 16(1), pages 74-101, April.
  6. Mortensen, Dale T & Pissarides, Christopher A, 1994. "Job Creation and Job Destruction in the Theory of Unemployment," Review of Economic Studies, Blackwell Publishing, vol. 61(3), pages 397-415, July. [Downloadable!] (restricted)
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  7. Michael Neugart & Donald Storrie, 2006. "The emergence of temporary work agencies," Oxford Economic Papers, Oxford University Press, vol. 58(1), pages 137-156, January. [Downloadable!] (restricted)
  8. Mortensen, Dale T. & Pissarides, Christopher A., 1999. "New developments in models of search in the labor market," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 39, pages 2567-2627 Elsevier. [Downloadable!] (restricted)
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  9. Boeri, Tito, 1999. "Enforcement of employment security regulations, on-the-job search and unemployment duration," European Economic Review, Elsevier, vol. 43(1), pages 65-89, January. [Downloadable!] (restricted)
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  10. Jahn, Elke J., 2008. "Reassessing the Wage Penalty for Temps in Germany," IZA Discussion Papers 3663, Institute for the Study of Labor (IZA). [Downloadable!]
  11. 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)
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  12. Wasmer, Etienne, 1999. "Competition for Jobs in a Growing Economy and the Emergence of Dualism," Economic Journal, Royal Economic Society, vol. 109(457), pages 349-71, July. [Downloadable!] (restricted)
    Other versions:
  13. Tommaso Nannicini, 2006. "The Determinants of Contract Length in Temporary Help Employment," LABOUR, CEIS, Fondazione Giacomo Brodolini and Blackwell Publishing Ltd, vol. 20(3), pages 453-474, 09. [Downloadable!] (restricted)
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