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A Price for Flexibility? The Temp Agency Wage Gap in Sweden 1998-2008


  • Andersson Joona, Pernilla

    () (SOFI, Stockholm University)

  • Wadensjö, Eskil

    () (Stockholm University)


Temporary agency employment has grown rapidly in Sweden as in many other countries. The sector was deregulated in the early 1990s and there are now only few remaining restrictions. Even though there are collective agreements covering a large part of the workers in the sector, the unions are worried about low wages and poor working conditions in the sector. This paper analyzes the development of the temporary agency wage gap during the period 1998-2008 using Swedish register data. We find that from a nearly non-existent gap in 2001 and a positive wage gap for women, both male and female temp agency workers received between 16 and 18 percent lower wages in 2008. This development appears partly to be explained by a lower return to university education among temp agency workers than among those employed in other sectors.

Suggested Citation

  • Andersson Joona, Pernilla & Wadensjö, Eskil, 2012. "A Price for Flexibility? The Temp Agency Wage Gap in Sweden 1998-2008," IZA Discussion Papers 6587, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp6587

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    References listed on IDEAS

    1. 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].
    2. Andrea Ichino & Fabrizia Mealli & Tommaso Nannicini, 2008. "From temporary help jobs to permanent employment: what can we learn from matching estimators and their sensitivity?," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 23(3), pages 305-327.
    3. Michael Kvasnicka, 2009. "Does Temporary Help Work Provide a Stepping Stone to Regular Employment?," NBER Chapters,in: Studies of Labor Market Intermediation, pages 335-372 National Bureau of Economic Research, Inc.
    4. 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.
    5. Susan N. Houseman & Arne L. Kalleberg & George A. Erickcek, 2003. "The Role of Temporary Agency Employment in Tight Labor Markets," ILR Review, Cornell University, ILR School, vol. 57(1), pages 105-127, October.
    6. Kvasnicka, Michael & Werwatz, Axel, 2002. "On the wages of temporary help service workers in Germany," SFB 373 Discussion Papers 2002,70, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
    7. Fredrik Andersson & Harry J. Holzer & Julia Lane, 2009. "Temporary Help Agencies and the Advancement Prospects of Low Earners," NBER Chapters,in: Studies of Labor Market Intermediation, pages 373-398 National Bureau of Economic Research, Inc.
    8. Jahn, Elke J. & Pozzoli, Dario, 2011. "Does the Sector Experience Affect the Pay Gap for Temporary Agency Workers?," IZA Discussion Papers 5837, Institute for the Study of Labor (IZA).
    9. Leuven, Edwin & Oosterbeek, Hessel, 2011. "Overeducation and Mismatch in the Labor Market," Handbook of the Economics of Education, Elsevier.
    10. 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.
    11. Jahn, Elke J., 2008. "Reassessing the Wage Penalty for Temps in Germany," IZA Discussion Papers 3663, Institute for the Study of Labor (IZA).
    12. Marloes de Graaf-Zijl & Ernest E. Berkhout, 2007. "Temporary agency work and the business cycle," International Journal of Manpower, Emerald Group Publishing, vol. 28(7), pages 539-556, October.
    13. 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.
    14. Chris Forde & Gary Slater, 2005. "Agency Working in Britain: Character, Consequences and Regulation," British Journal of Industrial Relations, London School of Economics, vol. 43(2), pages 249-271, June.
    15. Elke J. Jahn & Jan Bentzen, 2012. "What Drives the Demand for Temporary Agency Workers?," LABOUR, CEIS, vol. 26(3), pages 341-355, September.
    16. Andersson, Pernilla & Wadensjö, Eskil, 2004. "Statistik om bemanningsbranschen. Presentation och jämförelser av två nya databaser," Working Paper Series 6/2004, Stockholm University, Swedish Institute for Social Research.
    17. Susan N. Houseman & Arne L. Kalleberg & George A. Erickcek, 2001. "The Role of Temporary Help Employment in Tight Labor Markets," Upjohn Working Papers and Journal Articles 01-73, W.E. Upjohn Institute for Employment Research.
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    temporary agency employment; wages;

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

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