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Temporary Help Agencies and the Advancement Prospects of Low Earners

  • Fredrik Andersson
  • Harry J. Holzer
  • Julia Lane

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.

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File URL: http://www.nber.org/papers/w13434.pdf
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 13434.

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Date of creation: Sep 2007
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Publication status: published as Temporary Help Agencies and the Advancement Prospects of Low Earners , Fredrik Andersson, Harry J. Holzer, Julia Lane. in Studies of Labor Market Intermediation , Autor. 2009
Handle: RePEc:nbr:nberwo:13434
Note: LS
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  1. John M. Abowd & Lars Vilhuber, 2002. "The Sensitivity of Economic Statistics to Coding Errors in Personal Identifiers," Longitudinal Employer-Household Dynamics Technical Papers 2002-17, Center for Economic Studies, U.S. Census Bureau, revised Mar 2003.
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  3. John M. Abowd & Francis Kramarz & David N. Margolis, 1994. "High Wage Workers and High Wage Firms," NBER Working Papers 4917, National Bureau of Economic Research, Inc.
  4. Harry J. Holzer & Robert J. LaLonde, 1999. "Job Change and Job Stability Among Less-Skilled Young Workers," JCPR Working Papers 80, Northwestern University/University of Chicago Joint Center for Poverty Research.
  5. Rebitzer, James B, 1993. "Radical Political Economy and the Economics of Labor Markets," Journal of Economic Literature, American Economic Association, vol. 31(3), pages 1394-434, September.
  6. Farber, Henry S., 1999. "Mobility and stability: The dynamics of job change in labor markets," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 37, pages 2439-2483 Elsevier.
  7. Lawrence F. Katz, 1986. "Efficiency Wage Theories: A Partial Evaluation," NBER Chapters, in: NBER Macroeconomics Annual 1986, Volume 1, pages 235-290 National Bureau of Economic Research, Inc.
  8. David Autor & Susan Houseman, 2005. "Temporary Agency Employment as a Way out of Poverty?," NBER Working Papers 11742, National Bureau of Economic Research, Inc.
  9. Alan B. Krueger & Lawrence H. Summers, 1986. "Reflections on the Inter-Industry Wage Structure," NBER Working Papers 1968, National Bureau of Economic Research, Inc.
  10. David H. Autor & Susan N. Houseman, . "Do Temporary-Help Jobs Improve Labor Market Outcomes for Low-Skilled Workers? Evidence from "Work First"," Upjohn Working Papers and Journal Articles dhasnh2010, W.E. Upjohn Institute for Employment Research.
  11. John M. Abowd & Robert H. Creecy & Francis Kramarz, 2002. "Computing Person and Firm Effects Using Linked Longitudinal Employer-Employee Data," Longitudinal Employer-Household Dynamics Technical Papers 2002-06, Center for Economic Studies, U.S. Census Bureau.
  12. 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.
  13. John M. Abowd & John C. Haltiwanger & Julia I. Lane, 2004. "Integrated Longitudinal Employee-Employer Data for the United States," Longitudinal Employer-Household Dynamics Technical Papers 2004-02, Center for Economic Studies, U.S. Census Bureau.
  14. Charles L. Schultze, 2003. "The Consumer Price Index: Conceptual Issues and Practical Suggestions," Journal of Economic Perspectives, American Economic Association, vol. 17(1), pages 3-22, Winter.
  15. Daniel Immergluck, 1996. "What employers want: Job prospects for less-educated workers," The Review of Black Political Economy, Springer, vol. 24(4), pages 135-143, June.
  16. Yannis M. Ioannides & Linda Datcher Loury, 2004. "Job Information Networks, Neighborhood Effects, and Inequality," Journal of Economic Literature, American Economic Association, vol. 42(4), pages 1056-1093, December.
  17. David H. Autor, 2000. "Why Do Temporary Help Firms Provide Free General Skills Training?," NBER Working Papers 7637, National Bureau of Economic Research, Inc.
  18. Harry J. Holzer & Steven Raphael & Michael A. Stoll, 2006. "Employers in the Boom: How Did the Hiring of Less-Skilled Workers Change during the 1990s?," The Review of Economics and Statistics, MIT Press, vol. 88(2), pages 283-299, May.
  19. Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 410-42, June.
  20. 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.
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