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Flexibility vs. screening : the performance effects of temporary agency work strategies

Author

Listed:
  • Beckmann, Michael

    () (University of Basel)

  • Kuhn, Dieter

    () (University of Basel)

Abstract

This paper empirically examines the impact of temporary agency work strategies on firm performance using panel data from German establishments. Thereby, special attention is devoted to the question, whether there are performance differences between establishments using temporary agency workers (TAWs) as a buffer stock (flexibility strategy) and establishments testing TAWs for permanent positions (screening strategy). Theoretically, there are good reasons for using one strategy as well as adopting the other. On the other hand, however, both strategies may also be associated with serious drawbacks to be borne by the establishments. Our empirical analysis suggests that establishments following the flexibility strategy perform significantly worse than establishments following the screening strategy. Hence, we conclude that employers act in their own interest, if they credibly consider temporary workers for permanent jobs instead of implementing a system of first- and second-class employees.

Suggested Citation

  • Beckmann, Michael & Kuhn, Dieter, 2012. "Flexibility vs. screening : the performance effects of temporary agency work strategies," Working papers 2012/03, Faculty of Business and Economics - University of Basel.
  • Handle: RePEc:bsl:wpaper:2012/03
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    References listed on IDEAS

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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. Sandrine Cazes & Juan Ramón de Laiglesia, 2015. "Temporary contracts and wage inequality," Chapters,in: Labour Markets, Institutions and Inequality, chapter 6, pages 147-183 Edward Elgar Publishing.
    3. 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

    Keywords

    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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