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Are temporary work agencies stepping stones into regular employment?

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  • Joakim Hveem

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Abstract

This paper estimates the causal effect of temporary work agency (TWA) employment on the subsequent probability of employment in the regular labor market. The main purpose is to estimate the stepping-stone effect separately for natives and immigrants, where the latter group potentially benefits the most from TWA employment. Since no quasi-experiment is available, individual Differences-in-Differences and matching is used to deal with the potential selection bias. The results point at a negative regular employment effect, which slowly fades away over a couple of years. Thus no evidence of a stepping-stone effect is found. When conditioning on immigrants, this negative effect is absent. A long-run significant effect is found on overall employment probability (including TWA employment), there is even a long-run positive effect on annual earnings (mainly driven by women). Unemployment probabilities decreased, however the results in the estimation were less stable over time compared to the employment estimates, suggesting that the TWAs might keep individuals from exiting the labor market. Copyright Hveem; licensee Springer. 2013

Suggested Citation

  • Joakim Hveem, 2013. "Are temporary work agencies stepping stones into regular employment?," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-27, December.
  • Handle: RePEc:spr:izamig:v:2:y:2013:i:1:p:1-27:10.1186/2193-9039-2-21
    DOI: 10.1186/2193-9039-2-21
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    References listed on IDEAS

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    1. repec:ags:stataj:143011 is not listed on IDEAS
    2. Fraser Summerfield, 2009. "Help or Hindrance: Temporary Help Agencies and the United States Transitory Workforce," Working Papers 0911, University of Guelph, Department of Economics and Finance.
    3. Stefano Iacus & Gary King & Giuseppe Porro, 2008. "Matching for Causal Inference Without Balance Checking," UNIMI - Research Papers in Economics, Business, and Statistics unimi-1073, Universitá degli Studi di Milano.
    4. Andersson Joona, Pernilla & Wadensjö, Eskil, 2010. "Bemanningsbranschen 1998-2005: En bransch i förändring?," Working Paper Series 6/2010, Stockholm University, Swedish Institute for Social Research.
    5. Fredriksson, Peter & Johansson, Per, 2002. "Program evaluation and random program starts," Working Paper Series 2003:1, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    6. Blackwell, Matthew & Iacus, Stefano & King, Gary & Porro, Giuseppe, 2009. "cem: Coarsened exact matching in Stata," Stata Journal, StataCorp LP, vol. 9(4), pages 1-23.
    7. Bennmarker, Helge & Grönqvist, Erik & Öckert, Björn, 2009. "Effects of outsourcing employment services: evidence from a randomized experiment," Working Paper Series 2009:23, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    8. Andersson Joona, Pernilla & Wadensjö, Eskil, 2004. "Temporary Employment Agencies: A Route for Immigrants to Enter the Labour Market?," IZA Discussion Papers 1090, Institute of Labor Economics (IZA).
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    Cited by:

    1. Jahn, Elke Jutta & Rosholm, Michael, 2015. "The Cyclicality of the Stepping Stone Effect of Temporary Agency Employment," Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113117, Verein für Socialpolitik / German Economic Association.
    2. Neumann, Uwe, 2017. "Temporary agency employment in Germany: A strategic "buffer" for firms and regions in the crisis?," Ruhr Economic Papers 727, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.

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