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

  • Michael Beckmann

    ()

  • Dieter Kuhn

    ()

    (University of Basel)

Registered author(s):

    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� be- tween 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� signifi- cantly�� worse� than�� establishments following� the� screening� strategy. Hence,� we� con- clude� 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.

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    Paper provided by Faculty of Business and Economics - University of Basel in its series Working papers with number 2012/03.

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    Date of creation: 2012
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    Handle: RePEc:bsl:wpaper:2012/03
    Contact details of provider: Postal: Peter-Merian-Weg 6, Postfach, CH-4002 Basel
    Web page: http://wwz.unibas.ch

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    1. Engellandt, Axel & Riphahn, Regina T., 2003. "Temporary Contracts and Employee Effort," IZA Discussion Papers 780, Institute for the Study of Labor (IZA).
    2. George Erickcek & Susan Houseman & Arne Kalleberg, 2002. "The Effects of Temporary Services and Contracting Out on Low-Skilled Workers: Evidence from Auto Suppliers, Hospitals, and Public Schools," Upjohn Working Papers and Journal Articles 03-90, W.E. Upjohn Institute for Employment Research.
    3. Gianna Barbieri & Paolo Sestito, 2008. "Temporary Workers in Italy: Who Are They and Where They End Up," LABOUR, CEIS, vol. 22(1), pages 127-166, 03.
    4. Chen, Yu-Fu & Funke, Michael, 2008. "Threshold Effects of Dismissal Protection Regulation and the Emergence of Temporary Work Agencies," SIRE Discussion Papers 2008-05, Scottish Institute for Research in Economics (SIRE).
    5. Alison L. Booth & Marco Francesconi & Jeff Frank, 2002. "Temporary Jobs: Stepping Stones or Dead Ends?," LABORatorio R. Revelli Working Papers Series 8, LABORatorio R. Revelli, Centre for Employment Studies.
    6. Zwick, Thomas, 2004. "Employee participation and productivity," Labour Economics, Elsevier, vol. 11(6), pages 715-740, December.
    7. Daron Acemoglu & Jorn-Steffen Pischke, 1998. "The Structure of Wages and Investment in General Training," NBER Working Papers 6357, National Bureau of Economic Research, Inc.
    8. Spyros Arvanitis, 2005. "Modes of labor flexibility at firm level: Are there any implications for performance and innovation? Evidence for the Swiss economy," Industrial and Corporate Change, Oxford University Press, vol. 14(6), pages 993-1016, December.
    9. Alfred Kleinknecht & Remco Oostendorp & Menno Pradhan & C. W. M. Naastepad, 2006. "Flexible Labour, Firm Performance and the Dutch Job Creation Miracle," International Review of Applied Economics, Taylor & Francis Journals, vol. 20(2), pages 171-187.
    10. Sandra E. Black & Lisa M. Lynch, 2001. "How To Compete: The Impact Of Workplace Practices And Information Technology On Productivity," The Review of Economics and Statistics, MIT Press, vol. 83(3), pages 434-445, August.
    11. Uwe Jirjahn, 2010. "Works councils and employment growth in German establishments," Cambridge Journal of Economics, Oxford University Press, vol. 34(3), pages 475-500.
    12. Manfred Antoni & Elke J. Jahn, 2009. "Do Changes in Regulation Affect Employment Duration in Temporary Help Agencies?," ILR Review, Cornell University, ILR School, vol. 62(2), pages 226-251, January.
    13. Fiona MacPhail & Paul Bowles, 2008. "Temporary work and neoliberal government policy: evidence from British Columbia, Canada," International Review of Applied Economics, Taylor & Francis Journals, vol. 22(5), pages 545-563.
    14. Mohrenweiser, Jens & Zwick, Thomas, 2008. "Why Do Firms Train Apprentices? The Net Cost Puzzle Reconsidered," ZEW Discussion Papers 08-019, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    15. Origo, Federica & Pagani, Laura, 2009. "Flexicurity and job satisfaction in Europe: The importance of perceived and actual job stability for well-being at work," Labour Economics, Elsevier, vol. 16(5), pages 547-555, October.
    16. Jahn, Elke J. & Rosholm, Michael, 2010. "Looking Beyond the Bridge: How Temporary Agency Employment Affects Labor Market Outcomes," Working Papers 10-6, University of Aarhus, Aarhus School of Business, Department of Economics.
    17. Thomas Zwick, 2005. "Continuing Vocational Training Forms and Establishment Productivity in Germany," German Economic Review, Verein für Socialpolitik, vol. 6(2), pages 155-184, 05.
    18. Lars W. Mitlacher, 2005. "Temporary Agency Work, the Changing Employment Relationship and its Impact on Human Resource Management," management revue. Socio-economic Studies, Rainer Hampp Verlag, vol. 16(3), pages 370-388.
    19. Hirsch, Boris & Mueller, Steffen, 2010. "Temporary agency work and the user firm's productivity: First evidence from German Panel Data," Discussion Papers 68, Friedrich-Alexander-University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
    20. Dubin, Jeffrey A & McFadden, Daniel L, 1984. "An Econometric Analysis of Residential Electric Appliance Holdings and Consumption," Econometrica, Econometric Society, vol. 52(2), pages 345-62, March.
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