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Are temporary work agencies stepping-stones into regular employment?

  • Hveem, Joakim

    ()

    (Stockholm University Linnaeus Center for Integration Studies - SULCIS)

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    This paper estimates the causal effect of temporary work agency (TWA) employment on the subsequent probability of employment in the regular labor market. The main purpose is to estimate the stepping-stone effect separately for natives and immigrants, where the latter group potentially benefits the most from TWA employment. Since no quasi-experiment is available, individual Differences-in-Differences and matching is used to deal with the potential selection bias. The results point at a negative regular employment effect, which slowly fades away over a couple of years. Thus no evidence of a stepping-stone effect is found. When conditioning on immigrants this negative effect is absent. A long-run significant effect is found on overall employment probability (including TWA employment), there is even a long-run positive effect on annual earnings (mainly driven by women). Unemployment probabilities decreased, however the results in the estimation were less stable over time compared to the employment estimates, suggesting that the TWAs might keep individuals from exiting the labor market. Stratification on gender showed that the negative regular employment effect on women persisted for two more years compared to men.

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    File URL: http://www.su.se/polopoly_fs/1.100244.1347266955!/menu/standard/file/SULCIS_WP2012_3.pdf
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    Paper provided by Stockholm University Linnaeus Center for Integration Studies - SULCIS in its series SULCIS Working Papers with number 2012:3.

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    Length: 32 pages
    Date of creation: 12 Sep 2012
    Date of revision:
    Handle: RePEc:hhs:sulcis:2012_003
    Contact details of provider: Postal: Stockholm University Linnaeus Center for Integration Studies - SULCIS, Stockholm University, S-10691 Stockholm, Sweden
    Web page: http://www.su.se/sulcis

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    1. A. Smith, Jeffrey & E. Todd, Petra, 2005. "Does matching overcome LaLonde's critique of nonexperimental estimators?," Journal of Econometrics, Elsevier, vol. 125(1-2), pages 305-353.
    2. Matthew Blackwell & Stefano Iacus & Gary King & Giuseppe Porro, 2009. "cem: Coarsened exact matching in Stata," Stata Journal, StataCorp LP, vol. 9(4), pages 524-546, December.
    3. Dale T. Mortensen & Christopher A. Pissarides, 1993. "Job Creation and Job Destruction in the Theory of Unemployment," CEP Discussion Papers dp0110, Centre for Economic Performance, LSE.
    4. Stefano Iacus & Gary King & Giuseppe Porro, . "cem: Software for Coarsened Exact Matching," Journal of Statistical Software, American Statistical Association, vol. 30(i09).
    5. David Autor & Susan Houseman, 2009. "Do Temporary-Help Jobs Improve Labor Market Outcomes for Low-Skilled Workers? Evidence from 'Work First'," Upjohn Working Papers and Journal Articles 05-124, W.E. Upjohn Institute for Employment Research.
    6. Julia Lane & Kelly S. Mikelson & Pat Sharkey & Doug Wissoker, 2003. "Pathways to work for low-income workers: The effect of work in the temporary help industry," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 22(4), pages 581-598.
    7. Deborah A. Cobb-Clark & Thomas Crossley, 2003. "Econometrics for Evaluations: An Introduction to Recent Developments," The Economic Record, The Economic Society of Australia, vol. 79(247), pages 491-511, December.
    8. 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.
    9. Ichino, Andrea & Mealli, Fabrizia & Nannicini, Tommaso, 2006. "From Temporary Help Jobs to Permanent Employment: What Can We Learn from Matching Estimators and their Sensitivity?," CEPR Discussion Papers 5736, C.E.P.R. Discussion Papers.
    10. Stefano Iacus & Gary King & Giuseppe Porro, 2008. "Matching for Causal Inference Without Balance Checking," UNIMI - Research Papers in Economics, Business, and Statistics unimi-1073, Universitá degli Studi di Milano.
    11. Fraser Summerfield, 2009. "Help or Hindrance: Temporary Help Agencies and the United States Transitory Workforce," Working Papers 0911, University of Guelph, Department of Economics and Finance.
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