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Employment Effects of the EU Temporary and Agency Workers Directive in Sweden


  • Westéus, Morgan

    () (Department of Economics, Umeå School of Business and Economics)


This paper analyses possible effects on total employment, and the distribution between agency work and regular contracts as a consequence of the Swedish implementation of the EU Temporary and Agency Workers Directive in a dual labour market Mortensen-Pissarides search model. The directive states that the basic working and employment conditions for agency workers should be equal to those for a comparable employee at the client firm, and that all parties should actively facilitate the transition from agency employment to employment directly at the client firm. Even though the results suggest a negative net effect on total employment, the implementation is shown to have a positive impact on overall welfare, and that an increased transition probability from the agency sector into regular employment would contribute even more.

Suggested Citation

  • Westéus, Morgan, 2014. "Employment Effects of the EU Temporary and Agency Workers Directive in Sweden," Umeå Economic Studies 887, Umeå University, Department of Economics, revised 23 Oct 2014.
  • Handle: RePEc:hhs:umnees:0887

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    More about this item


    Labour law; EU directive implementation; temporary agency work; unemployment;

    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
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets
    • J48 - Labor and Demographic Economics - - Particular Labor Markets - - - Particular Labor Markets; Public Policy
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • K31 - Law and Economics - - Other Substantive Areas of Law - - - Labor Law

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