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Reassessing the Pay Gap for Temps in Germany

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  • Jahn Elke J.

    () (Associate Professor, Aarhus School of Business, Aarhus University, Department of Economics, Frichshuset, Hermodsvej 22, 8230 Aabyhoej, Denmark)

Abstract

As a consequence of the rapid growth of temporary agency employment in Germany, the debate on the remuneration of temporary agency workers has intensified recently. The study finds that the earnings gap of temporary help workers in Germany is indeed large and increased during the past decade. Decomposition reveals that the widening gap mainly is driven by changes in relative skill prices and less by differences in the workforce composition. Temps already have to accept a marked earnings decline before entering the temporary help sector. Nevertheless, after leaving the sector temporary help workers no longer have to accept a pay penalty. A recent reform set a high incentive for temporary help agencies to pay their workers according to a collective agreement. Surprisingly, the unionization of the sector could not bring the widening earnings gap to a halt.

Suggested Citation

  • Jahn Elke J., 2010. "Reassessing the Pay Gap for Temps in Germany," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 230(2), pages 208-233, April.
  • Handle: RePEc:jns:jbstat:v:230:y:2010:i:2:p:208-233
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Schiersch, Alexander, 2016. "Considering the (Un)observed: temporary agency work in productivity estimations," Annual Conference 2016 (Augsburg): Demographic Change 145749, Verein für Socialpolitik / German Economic Association.
    2. Sarah Hamersma & Carolyn Heinrich & Peter Mueser, 2014. "Temporary Help Work: Earnings, Wages, and Multiple Job Holding," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 53(1), pages 72-100, January.
    3. Rheinisch-Westfälisches Institut für Wirtschaftsforschung & Bertelsmann-Stiftung (ed.), 2012. "Herausforderung Zeitarbeit: Studie im Auftrag der Bertelsmann Stiftung," RWI Projektberichte, RWI - Leibniz-Institut für Wirtschaftsforschung, number 72612.
    4. Jahn, Elke J. & Rosholm, Michael, 2018. "The Cyclicality of the Stepping-Stone Effect of Temporary Agency Employment," IZA Discussion Papers 11377, Institute for the Study of Labor (IZA).
    5. Grund, Christian & Minten, Axel & Toporova, Nevena, 2017. "The Motivation of Temporary Agency Workers: An Empirical Analysis," IZA Discussion Papers 11229, Institute for the Study of Labor (IZA).
    6. Henna Busk & Elke J. Jahn & Christine Singer, 2015. "Do Changes in Regulation Affect Temporary Agency Workers' Job Satisfaction?," SOEPpapers on Multidisciplinary Panel Data Research 732, DIW Berlin, The German Socio-Economic Panel (SOEP).
    7. Jahn, Elke J. & Pozzoli, Dario, 2011. "Does the Sector Experience Affect the Pay Gap for Temporary Agency Workers?," IZA Discussion Papers 5837, Institute for the Study of Labor (IZA).
    8. Smirnych, L. I. & Wörgötter, Andreas, 2016. "The importance of institutional and organizational characteristics for the use of fixed-term and agency work contracts in Russia," ECON WPS - Vienna University of Technology Working Papers in Economic Theory and Policy 09/2016, Vienna University of Technology, Institute for Mathematical Methods in Economics, Research Group Economics (ECON).
    9. Jahn, Elke J. & Pozzoli, Dario, 2013. "The pay gap of temporary agency workers — Does the temp sector experience pay off?," Labour Economics, Elsevier, vol. 24(C), pages 48-57.
    10. Alexander Schiersch, 2015. "TFP, Labor Productivity and the (Un)observed Labor Input: Temporary Agency Work," Discussion Papers of DIW Berlin 1532, DIW Berlin, German Institute for Economic Research.
    11. repec:bla:indres:v:56:y:2017:i:3:p:514-544 is not listed on IDEAS
    12. Niebuhr, Annekatrin & Buch, Tanja, 2013. "Wage effects of labor market entry via temporary work agency employment - evidence for German apprenticeship graduates," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79818, Verein für Socialpolitik / German Economic Association.

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