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Temporary agency work and the user firm's productivity: First evidence from German Panel Data


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  • Hirsch, Boris
  • Mueller, Steffen


This paper investigates the relationship between the use of temporary agency work and the user firm's productivity. We hypothesise that modest use enhances numerical flexibility and thus productivity, while excessive use mirrors lowproductivity strategies utilising less social and human capital and primarily aims at circumventing labour market regulations. In contrast to the sparse existing literature on this issue, we apply a large panel data set and fixed effects techniques. We find a robust hump-shaped relationship between the extent of temporary agency work use and the user firm's productivity, which corroborates our hypotheses. -- Das vorliegende Papier untersucht den Zusammenhang zwischen Leiharbeitseinsatz und der Produktivität der Entleihfirma. Ausgangspunkt ist die Überlegung, dass moderater Leiharbeitseinsatz die numerische Flexibilität und damit Produktivität des Entleihers erhöht, während exzessive Nutzung von Leiharbeit eine Niedrigproduktivitätsstrategie mit geringem Einsatz von Human- und Sozialkapital widerspiegeln dürfte, die in erster Linie auf die Umgehung von Arbeitsmarktregulierungen abzielt. Im Gegensatz zur spärlichen Literatur zu den Produktivitätseffekten von Leiharbeit nutzen wir einen großen Paneldatensatz und Fixe-Effekte-Schätzungen. Im Einklang mit unseren Hypothesen finden wir einen robusten buckelförmigen Zusammenhang zwischen der Produktivität des Entleihers und dem Anteil an Leiharbeitnehmern in seiner Belegschaft.

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Paper provided by Friedrich-Alexander-University Erlangen-Nuremberg, Chair of Labour and Regional Economics in its series Discussion Papers with number 68.

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Date of creation: 2010
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Handle: RePEc:zbw:faulre:68

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Keywords: temporary agency work; firm productivity; flexible labour;

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  1. Michael Moritz, 2009. "Spatial Effects of Open Borders on the Czech Labour Market," WIFO Working Papers 345, WIFO.
  2. Addison, John T. & Schnabel, Claus, 2009. "Worker directors: a German product that didn't export?," IWQW Discussion Paper Series 01/2009, Friedrich-Alexander-Universität Erlangen-Nürnberg, Institut für Wirtschaftspolitik und Quantitative Wirtschaftsforschung (IWQW).
  3. Hirsch, Boris & Schank, Thorsten & Schnabel, Claus, 2009. "Works Councils and Separations: Voice, Monopoly, and Insurance Effects," IZA Discussion Papers 4126, Institute for the Study of Labor (IZA).
  4. Mosthaf, Alexander & Schank, Thorsten & Schnabel, Claus, 2009. "Low-wage employment versus unemployment: which one provides better prospects for women?," Discussion Papers 65, Friedrich-Alexander-University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
  5. Jung, Sven & Schnabel, Claus, 2009. "Paying more than necessary? The wage cushion in Germany," Discussion Papers 63, Friedrich-Alexander-University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
  6. List, Juliane & Schnabel, Claus & Klaus, Anton, 2010. "Erfolg und Misserfolg bei der Ausbildungsplatzsuche: Eine empirische Untersuchung von Hauptschülern im Landkreis Nürnberger Land," Discussion Papers 67, Friedrich-Alexander-University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
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Cited by:
  1. Michael Beckmann & Dieter Kuhn, 2012. "Flexibility vs. screening: The performance effects of temporary agency work strategies," Working papers 2012/03, Faculty of Business and Economics - University of Basel.
  2. William Addessi & Enrico Saltari & Riccardo Tilli, 2011. "R&D and Innovation Activities and the Use of External Numerical Flexibility," Working Papers 150, University of Rome La Sapienza, Department of Public Economics.
  3. Sebastian Nielen & Alexander Schiersch, 2011. "Temporary Agency Work and Firm Competitiveness: Evidence from German Manufacturing Firms," Discussion Papers of DIW Berlin 1135, DIW Berlin, German Institute for Economic Research.


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