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Employment Protection and Temporary Work Agencies

  • Florian Baumann
  • Mario Mechtel
  • Nikolai Stähler

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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File URL: http://hdl.handle.net/10.1111/j.1467-9914.2010.00493.x
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Article provided by CEIS in its journal LABOUR.

Volume (Year): 25 (2011)
Issue (Month): 3 (09)
Pages: 308-329

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Handle: RePEc:bla:labour:v:25:y:2011:i:3:p:308-329
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