IDEAS home Printed from https://ideas.repec.org/p/hhs/gunwpe/0083.html
   My bibliography  Save this paper

Temporary work agencies and equilibrium unemployment

Author

Listed:
  • Neugart, Michael

    (Minda de Gunzburg Center for European Studies, Harvard University)

  • Storrie, Donald

    (Centre for European Labour Market Studies, Department of Economics)

Abstract

A striking feature of OECD labor markets in the 1990s has been the very rapid increase of temporary agency work. We augment the equilibrium unemployment model as developed by Pissarides and Mortensen with temporary work agencies in order to focus on their role as matching intermediaries and to examine the aggregate impact on employment. Our model implies that the improvement in the matching e±ciency of agencies led to the emergence and growth of temporary agency work. We also show that temporary agency work does not necessarily crowd-out other jobs.

Suggested Citation

  • Neugart, Michael & Storrie, Donald, 2002. "Temporary work agencies and equilibrium unemployment," Working Papers in Economics 83, University of Gothenburg, Department of Economics.
  • Handle: RePEc:hhs:gunwpe:0083
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/2077/2867
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Fredriksson, Peter & Holmlund, Bertil, 2001. "Optimal Unemployment Insurance in Search Equilibrium," Journal of Labor Economics, University of Chicago Press, vol. 19(2), pages 370-399, April.
    2. Jan Boone & Peter Fredriksson & Bertil Holmlund & Jan C. van Ours, 2007. "Optimal Unemployment Insurance with Monitoring and Sanctions," Economic Journal, Royal Economic Society, vol. 117(518), pages 399-421, March.
    3. Boone, J. & van Ours, J.C., 2000. "Modeling Financial Incentives to get Unemployment Back to Work," Other publications TiSEM 2f935765-37ac-4cae-aa85-e, Tilburg University, School of Economics and Management.
    4. Dale T. Mortensen, 1982. "The Matching Process as a Noncooperative Bargaining Game," NBER Chapters, in: The Economics of Information and Uncertainty, pages 233-258, National Bureau of Economic Research, Inc.
    5. Christopher A. Pissarides & Barbara Petrongolo, 2001. "Looking into the Black Box: A Survey of the Matching Function," Journal of Economic Literature, American Economic Association, vol. 39(2), pages 390-431, June.
    6. Burda, Michael C, 1992. " A Note on Firing Costs and Severance Benefits in Equilibrium Unemployment," Scandinavian Journal of Economics, Wiley Blackwell, vol. 94(3), pages 479-489.
    7. Jan Boone & Jan C. van Ours, 2006. "Modeling Financial Incentives to Get the Unemployed Back to Work," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 162(2), pages 227-252, June.
    8. David T. Coe & Dennis J. Snower, 1997. "Policy Complementarities: The Case for Fundamental Labor Market Reform," IMF Staff Papers, Palgrave Macmillan, vol. 44(1), pages 1-35, March.
    9. Wasmer, Etienne, 1999. "Competition for Jobs in a Growing Economy and the Emergence of Dualism," Economic Journal, Royal Economic Society, vol. 109(457), pages 349-371, July.
    10. Alison L. Booth & Marco Francesconi & Jeff Frank, 2002. "Temporary Jobs: Stepping Stones Or Dead Ends?," Economic Journal, Royal Economic Society, vol. 112(480), pages 189-213, June.
    11. David H. Autor, 2001. "Why Do Temporary Help Firms Provide Free General Skills Training?," The Quarterly Journal of Economics, Oxford University Press, vol. 116(4), pages 1409-1448.
    12. Fonseca, Raquel & Lopez-Garcia, Paloma & Pissarides, Christopher A., 2001. "Entrepreneurship, start-up costs and employment," European Economic Review, Elsevier, vol. 45(4-6), pages 692-705, May.
    13. Jan Boone & Peter Fredriksson & Bertil Holmlund & Jan C. van Ours, 2007. "Optimal Unemployment Insurance with Monitoring and Sanctions," Economic Journal, Royal Economic Society, vol. 117(518), pages 399-421, March.
    14. Holmlund, Bertil & Linden, Johan, 1993. "Job matching, temporary public employment, and equilibrium unemployment," Journal of Public Economics, Elsevier, vol. 51(3), pages 329-343, July.
    15. Juan José Dolado & Florentino Felgueroso & Juan F. Jimeno, "undated". "Explaining Youth Labor Market Problems in Spain: Crowding-Out, Institutions, or Technology Shifts?," Working Papers 2000-09, FEDEA.
    16. Peter AUER & Sandrine CAZES, 2000. "The resilience of the long-term employment relationship: Evidence from the industrialized countries," International Labour Review, International Labour Organization, vol. 139(4), pages 379-408, December.
    17. Juan J Dolado & Carlos Garcia--Serrano & Juan F. Jimeno, 2002. "Drawing Lessons From The Boom Of Temporary Jobs In Spain," Economic Journal, Royal Economic Society, vol. 112(721), pages 270-295, June.
    18. Lewis M. Segal & Daniel G. Sullivan, 1997. "The Growth of Temporary Services Work," Journal of Economic Perspectives, American Economic Association, vol. 11(2), pages 117-136, Spring.
    19. Susan N. Houseman & Arne L. Kalleberg & George A. Erickcek, 2001. "The Role of Temporary Help Employment in Tight Labor Markets," Upjohn Working Papers 01-73, W.E. Upjohn Institute for Employment Research.
    20. Bertil Holmlund & Donald Storrie, 2002. "Temporary Work In Turbulent Times: The Swedish Experience," Economic Journal, Royal Economic Society, vol. 112(480), pages 245-269, June.
    21. Diamond, Peter A, 1981. "Mobility Costs, Frictional Unemployment, and Efficiency," Journal of Political Economy, University of Chicago Press, vol. 89(4), pages 798-812, August.
    22. Saint-Paul, Gilles, 1998. "A framework for analyzing the political support for active labor market policy," Journal of Public Economics, Elsevier, vol. 67(2), pages 151-165, February.
    23. John J. McCall, 1982. "The Economics of Information and Uncertainty," NBER Books, National Bureau of Economic Research, Inc, number mcca82-1, June.
    24. Dolado, Juan J. & Felgueroso, Florentino & Jimeno, Juan F., 2000. "Youth labour markets in Spain: Education, training, and crowding-out," European Economic Review, Elsevier, vol. 44(4-6), pages 943-956, May.
    25. Almus, Matthias & Egeln, Jürgen & Lechner, Michael & Pfeiffer, Friedhelm & Spengler, Hannes, 1998. "Die gemeinnützige Arbeitnehmerüberlassung in Rheinland-Pfalz: Eine ökonometrische Analyse des Wiedereingliederungserfolgs," ZEW Discussion Papers 98-36, ZEW - Leibniz Centre for European Economic Research.
    26. Richard Jackman & Christopher A. Pissarides & S Savouri, 1990. "Labour Market Policies and Unemployment in the OECD," CEP Discussion Papers dp0011, Centre for Economic Performance, LSE.
    27. Gabriel, J. & Neugart, Michael, 2001. "Ökonomie als Grundlage politischer Entscheidungen. Essays on Growth, Labor Markets, and European Integration in Honor of Michael Bolle," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 57335, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    28. Michael Spence, 1973. "Job Market Signaling," The Quarterly Journal of Economics, Oxford University Press, vol. 87(3), pages 355-374.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. J. Ignacio García‐Pérez & Fernando Muñoz‐Bullón, 2005. "Temporary Help Agencies and Occupational Mobility," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 67(2), pages 163-180, April.
    2. Kyyrä, Tomi & Parrotta, Pierpaolo & Rosholm, Michael, 2013. "The effect of receiving supplementary UI benefits on unemployment duration," Labour Economics, Elsevier, vol. 21(C), pages 122-133.
    3. Nathalie Havet & Xavier Joutard & Alexis Penot, 2019. "Les pratiques d’activité réduite et leurs impacts sur les trajectoires professionnelles : une revue de la littérature," Revue d'économie politique, Dalloz, vol. 129(1), pages 11-47.
    4. Nathalie Havet & Xavier Joutard & Alexis Pénot, 2019. "Les pratiques d’activité réduite et leurs impacts sur les trajectoires professionnelles : Une revue de la littérature: Une revue de la littérature," Sciences Po publications info:hdl:2441/1v5orglviq8, Sciences Po.
    5. David H. Autor & Susan N. Houseman, 2010. "Do Temporary-Help Jobs Improve Labor Market Outcomes for Low-Skilled Workers? Evidence from "Work First"," American Economic Journal: Applied Economics, American Economic Association, vol. 2(3), pages 96-128, July.
    6. Lars W. Mitlacher, 2005. "Temporary Agency Work, the Changing Employment Relationship and its Impact on Human Resource Management," management revue - Socio-Economic Studies, Nomos Verlagsgesellschaft mbH & Co. KG, vol. 16(3), pages 370-388.
    7. Michael Kvasnicka, 2003. "Inside the Black Box of Temporary Help Agencies," Labor and Demography 0310003, University Library of Munich, Germany.
    8. Etienne Campens & Solenne Tanguy, 2005. "The market for job placement : a model of head-hunters," Cahiers de la Maison des Sciences Economiques v06027, Université Panthéon-Sorbonne (Paris 1).
    9. Catalina Amuedo-Dorantes & Miguel Malo & Fernando Muñoz-Bullón, 2008. "The Role of Temporary Help Agency Employment on Temp-to-Perm Transitions," Journal of Labor Research, Springer, vol. 29(2), pages 138-161, June.
    10. 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, September.
    11. Smirnykh, Larisa, 2005. "Labor leasing: economic theory, EU and Russia experience," MPRA Paper 21568, University Library of Munich, Germany.
    12. Etienne Campens & Solenne Tanguy, 2006. "The market for job placement: a model of headhunters," Post-Print halshs-00113476, HAL.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bruno, VAN DER LINDEN, 2003. "Unemployment insurance and training in an equilibrium matching model with heterogeneous agents," LIDAM Discussion Papers IRES 2003001, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    2. Etienne Lehmann & Bruno Van Der Linden, 2007. "On the Optimality of Search Matching Equilibrium When Workers Are Risk Averse," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 9(5), pages 867-884, October.
    3. Tito Boeri & Jan van Ours, 2013. "The Economics of Imperfect Labor Markets: Second Edition," Economics Books, Princeton University Press, edition 1, number 10142.
    4. Van der Linden, Bruno & Dor, Eric, 2001. "Labor Market Policies and Equilibrium Employment : Theory and Application for Belgium," LIDAM Discussion Papers IRES 2001005, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    5. Jan Boone & Peter Fredriksson & Bertil Holmlund & Jan C. van Ours, 2007. "Optimal Unemployment Insurance with Monitoring and Sanctions," Economic Journal, Royal Economic Society, vol. 117(518), pages 399-421, March.
    6. Mortensen, Dale T & Pissarides, Christopher, 2001. "Taxes, Subsidies and Equilibrium Labour Market Outcomes," CEPR Discussion Papers 2989, C.E.P.R. Discussion Papers.
    7. Alonso-Borrego, César & Fernández-Villaverde, Jesús & Galdon-Sanchez, Jose Enrique, 2004. "Evaluating Labor Market Reforms: A General Equilibrium Approach," IZA Discussion Papers 1129, Institute of Labor Economics (IZA).
    8. Van der Linden, Bruno & Dor, Eric, 1998. "The net effect of unemployment benefits, sanctions and training on aggregate unemployment outflows," LIDAM Discussion Papers IRES 2000020, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES), revised 07 Sep 2000.
    9. Peter Fredriksson & Bertil Holmlund, 2006. "Improving Incentives in Unemployment Insurance: A Review of Recent Research," Journal of Economic Surveys, Wiley Blackwell, vol. 20(3), pages 357-386, July.
    10. Müller, Kai-Uwe & Oschmiansky, Frank, 2006. "Die Sanktionspolitik der Arbeitsagenturen nach den Hartz-Reformen: Analyse der Wirkungen des Ersten Gesetztes für moderne Dienstleistungen am Arbeitsmarkt," Discussion Papers, Research Unit: Labor Market Policy and Employment SP I 2006-116, WZB Berlin Social Science Center.
    11. Peter Fredriksson & Bertil Holmlund, 2006. "Optimal unemployment insurance design: Time limits, monitoring, or workfare?," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 13(5), pages 565-585, September.
    12. Jan Boone & Peter Fredriksson & Bertil Holmlund & Jan C. van Ours, 2007. "Optimal Unemployment Insurance with Monitoring and Sanctions," Economic Journal, Royal Economic Society, vol. 117(518), pages 399-421, March.
    13. Charlot, Olivier & Malherbet, Franck, 2010. "Education and the Welfare Gains from Employment Protection," IZA Discussion Papers 4799, Institute of Labor Economics (IZA).
    14. David H. Autor, 2009. "Introduction to "Studies of Labor Market Intermediation"," NBER Chapters, in: Studies of Labor Market Intermediation, pages 1-23, National Bureau of Economic Research, Inc.
    15. repec:eee:labchp:v:3:y:1999:i:pb:p:2567-2627 is not listed on IDEAS
    16. Vodopivec, Milan & Raju, Dhushyanth, 2002. "Income support systems for the unemployed : issues and options," Social Protection Discussion Papers and Notes 25529, The World Bank.
    17. Bruno Van der Linden & Eric Dor, 2003. "The net effect of unemployment benefits, sanctions and training on regular employment," Working Papers 2003-ECO-01, IESEG School of Management.
    18. Gunther Tichy, 2014. "Flexicurity – ein an seiner Umsetzung scheiterndes Konzept," WIFO Monatsberichte (monthly reports), WIFO, vol. 87(8), pages 537-553, August.
    19. David H. Autor & Susan N. Houseman, 2010. "Do Temporary-Help Jobs Improve Labor Market Outcomes for Low-Skilled Workers? Evidence from "Work First"," American Economic Journal: Applied Economics, American Economic Association, vol. 2(3), pages 96-128, July.
    20. Manning, Alan, 2009. "You can't always get what you want: The impact of the UK Jobseeker's Allowance," Labour Economics, Elsevier, vol. 16(3), pages 239-250, June.
    21. Ferreira, Maria & de Grip, Andries & van der Velden, Rolf, 2018. "Does informal learning at work differ between temporary and permanent workers? Evidence from 20 OECD countries," Labour Economics, Elsevier, vol. 55(C), pages 18-40.

    More about this item

    Keywords

    temporary work agencies; matching model; equilibrium unemployment; crowding-out;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hhs:gunwpe:0083. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://edirc.repec.org/data/naiguse.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ann-Christin Räätäri Nyström (email available below). General contact details of provider: https://edirc.repec.org/data/naiguse.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.