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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
    Date of revision:
    Handle: RePEc:bsl:wpaper:2012/03
    Contact details of provider: Postal: Peter-Merian-Weg 6, Postfach, CH-4002 Basel
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    9. Daron Acemoglu & Jorn-Steffen Pischke, 1999. "The Structure of Wages and Investment in General Training," Journal of Political Economy, University of Chicago Press, vol. 107(3), pages 539-572, June.
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    11. 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.
    12. 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.
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    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. Lars W. Mitlacher, 2007. "The Role of Temporary Agency Work in Different Industrial Relations Systems - a Comparison between Germany and the USA," British Journal of Industrial Relations, London School of Economics, vol. 45(3), pages 581-606, 09.
    18. 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.
    19. 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.
    20. 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.
    21. Uwe Jirjahn, 2010. "Works councils and employment growth in German establishments," Cambridge Journal of Economics, Oxford University Press, vol. 34(3), pages 475-500.
    22. 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.
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