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Temporary agency work and firm performance : evidence from German establishment-level panel data


  • Beckmann, Michael

    () (University of Basel)

  • Kuhn, Dieter

    () (University of Basel)


This paper empirically examines the impact of temporary agency work on firm performance using panel data from German establishments. Thereby, special attention is devoted to the question, whether there are performance differences between firms using temporary agency workers (TAWs) as a buffer stock (flexibility strategy) and firms using TAWs for screening purposes (screening strategy). While the theoretical discussion on this issue does not lead to clear–cut results, our empirical investigation provides the following results. First, we find an inverse U–shaped relationship between the share of TAWs and firm performance. Second, we obtain that firms following the screening strategy are significantly more productive than firms following the flexibility strategy. These results are found to be valid in both cross–sectional and panel data settings, so they are robust to unobserved firm heterogeneity.

Suggested Citation

  • Beckmann, Michael & Kuhn, Dieter, 2009. "Temporary agency work and firm performance : evidence from German establishment-level panel data," Working papers 2009/01, Faculty of Business and Economics - University of Basel.
  • Handle: RePEc:bsl:wpaper:2009/01

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    Cited by:

    1. Addison, John T. & Teixeira, Paulino & Grunau, Philipp & Bellmann, Lutz, 2018. "Worker Representation and Temporary Employment in Germany: The Deployment and Extent of Fixed-Term Contracts and Temporary Agency Work," IZA Discussion Papers 11378, Institute of Labor Economics (IZA).
    2. Beckmann, Michael & Kuhn, Dieter, 2010. "Complementarities between workplace organisation and human resource management : evidence from Swiss firm-level panel data," Working papers 2010/03, Faculty of Business and Economics - University of Basel.
    3. Grund, Christian & Minten, Axel & Toporova, Nevena, 2017. "The Motivation of Temporary Agency Workers: An Empirical Analysis," IZA Discussion Papers 11229, Institute of Labor Economics (IZA).
    4. Lucia Aiello & Giuseppe Espa & Mauro Gatti & Andrea Mazzitelli, 2015. "The propensity to employ high skilled employees. An empirical analysis on Manager and Intellectual Professions," DEM Discussion Papers 2015/11, Department of Economics and Management.
    5. 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.

    More about this item


    Temporary agency work; firm performance; flexibility strategy; screening strategy;

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets
    • J82 - Labor and Demographic Economics - - Labor Standards - - - Labor Force Composition
    • M55 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Labor Contracting Devices


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