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Temporary Help Agencies and the Advancement Prospects of Low Earners

Author

Listed:
  • Andersson, Fredrik

    (Lund University)

  • Holzer, Harry J.

    (Georgetown University)

  • Lane, Julia

    (New York University)

Abstract

In this paper we use a very large matched database on firms and employees to analyze the use of temporary agencies by low earners, and to estimate the impact of temp employment on subsequent employment outcomes for these workers. Our results show that, while temp workers have lower earnings than others while working at these agencies, their subsequent earnings are often higher – but only if they manage to gain stable work with other employers. Furthermore, the positive effects seem mostly to occur because those working for temp agencies subsequently gain access to higher-wage firms than do comparable low earners who do not work for temps. The positive effects we find seem to persist for up to six years beyond the period during which the temp employment occurred.

Suggested Citation

  • Andersson, Fredrik & Holzer, Harry J. & Lane, Julia, 2007. "Temporary Help Agencies and the Advancement Prospects of Low Earners," IZA Discussion Papers 3113, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp3113
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    References listed on IDEAS

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    Cited by:

    1. Matteo Picchio & Mattia Filomena, 2021. "Are Temporary Jobs Stepping Stones Or Dead Ends? A Meta-Analytical Review Of The Literature," Working Papers 455, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
    2. Jahn, Elke J. & Pozzoli, Dario, 2011. "Does the Sector Experience Affect the Pay Gap for Temporary Agency Workers?," IZA Discussion Papers 5837, Institute of Labor Economics (IZA).
    3. Jahn, Elke J. & Rosholm, Michael, 2010. "Looking beyond the bridge: How temporary agency employment affects labor market outcomes," IAB-Discussion Paper 201009, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    4. Bart Cockx & Matteo Picchio, 2012. "Are Short-lived Jobs Stepping Stones to Long-Lasting Jobs?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 74(5), pages 646-675, October.
    5. Carolyn J. Heinrich & Peter R. Mueser & Kenneth R. Troske, 2009. "The Role of Temporary Help Employment in Low-Wage Worker Advancement," NBER Chapters, in: Studies of Labor Market Intermediation, pages 399-436, National Bureau of Economic Research, Inc.
    6. Sarah Hamersma & Carolyn Heinrich & Peter Mueser, 2014. "Temporary Help Work: Earnings, Wages, and Multiple Job Holding," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 53(1), pages 72-100, January.
    7. Werner Eichhorst & Michela Braga & Andrea Broughton & An de Coen & Henri Culot & Filip Dorssemont & Ulrike Famira-Mühlberger & Maarten Gerard & Ulrike Huemer & Michael J. Kendzia & Jakob Louis Pederse, 2013. "The Role and Activities of Employment Agencies," WIFO Studies, WIFO, number 46987, June.
    8. Okudaira, Hiroko & Ohtake, Fumio & Kume, Koichi & Tsuru, Kotaro, 2013. "What does a temporary help service job offer? Empirical suggestions from a Japanese survey," Journal of the Japanese and International Economies, Elsevier, vol. 28(C), pages 37-68.
    9. Andersson Joona, Pernilla & Wadensjö, Eskil, 2012. "A Price for Flexibility? The Temp Agency Wage Gap in Sweden 1998-2008," IZA Discussion Papers 6587, Institute of Labor Economics (IZA).
    10. Jahn Elke J., 2010. "Reassessing the Pay Gap for Temps in Germany," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 230(2), pages 208-233, April.
    11. Niebuhr, Annekatrin & Buch, Tanja, 2013. "Wage effects of labor market entry via temporary work agency employment - evidence for German apprenticeship graduates," VfS Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79818, Verein für Socialpolitik / German Economic Association.
    12. Vanselow, Achim & Weinkopf, Claudia, 2009. "Zeitarbeit in europäischen Ländern: Lehren für Deutschland?," Arbeitspapiere 182, Hans-Böckler-Stiftung, Düsseldorf.
    13. Jahn, Elke J. & Rosholm, Michael, 2014. "Looking beyond the bridge: The effect of temporary agency employment on labor market outcomes," European Economic Review, Elsevier, vol. 65(C), pages 108-125.
    14. Jahn, Elke J., 2008. "Reassessing the Wage Penalty for Temps in Germany," IZA Discussion Papers 3663, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    temp; employment; advancement; intermediaries;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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