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Temporary work agencies and equilibrium unemployment

Author

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  • 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
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    File URL: http://hdl.handle.net/2077/2867
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    References listed on IDEAS

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    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.
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    Citations

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    Cited by:

    1. 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.
    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. 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).
    4. 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.
    5. repec:hal:journl:halshs-00113476 is not listed on IDEAS
    6. 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.
    7. Smirnykh, Larisa, 2005. "Labor leasing: economic theory, EU and Russia experience," MPRA Paper 21568, University Library of Munich, Germany.

    More about this item

    Keywords

    temporary work agencies; matching model; equilibrium unemployment; crowding-out;

    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

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