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Temporary Help Employment in Recession and Recovery

Author

Listed:
  • Susan N. Houseman

    (W.E. Upjohn Institute for Employment Research)

  • Carolyn Heinrich

    (University of Texas at Austin)

Abstract

The temporary help industry, although small, plays a significant role in the macro economy, reflecting employers' growing reliance on temporary help agencies to provide flexibility in meeting staffing needs. Drawing on detailed temporary-help order data between 2007 and 2011 from a large, nationally representative staffing company, we provide insights into the characteristics of temporary help work, employers’ use of temporary agencies to screen workers for permanent positions, and the industry's role in labor market adjustment over the business cycle. We estimate that the temporary help industry accounted for a large share of gross job losses and job gains over this period, as well as for a sizable share of net separations and hires. Nearly a third of assignments were observed to end prematurely due to worker performance problems (largely soft skills deficiencies) or quits, and hire rates of workers in temp-to-hire contracts were low. Although most temporary help assignments are short-lived, during the recession, companies lengthened temporary help assignments and reduced hiring from their pool of temps, possibly in response to economic uncertainty. Nominal wage growth among new temporary hires was weak over the five-year period and failed to keep pace with inflation.

Suggested Citation

  • Susan N. Houseman & Carolyn Heinrich, 2015. "Temporary Help Employment in Recession and Recovery," Upjohn Working Papers 15-227, W.E. Upjohn Institute for Employment Research.
  • Handle: RePEc:upj:weupjo:15-227
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    References listed on IDEAS

    as
    1. Alison L. Booth & Marco Francesconi & Jeff Frank, 2002. "Temporary Jobs: Stepping Stones Or Dead Ends?," Economic Journal, Royal Economic Society, vol. 112(480), pages 189-213, June.
    2. Susan N. Houseman, 2001. "Why Employers Use Flexible Staffing Arrangements: Evidence from an Establishment Survey," ILR Review, Cornell University, ILR School, vol. 55(1), pages 149-170, October.
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    6. 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.
    7. Jesse Rothstein, 2012. "The Labor Market Four Years into the Crisis: Assessing Structural Explanations," ILR Review, Cornell University, ILR School, vol. 65(3), pages 467-500, July.
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    10. Marcus Dillender & Carolyn J. Heinrich & Susan N. Houseman, 2015. "The Potential Effects of Federal Health Insurance Reforms on Employment Arrangements and Compensation," Upjohn Working Papers 15-228, W.E. Upjohn Institute for Employment Research.
    11. 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.
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    Cited by:

    1. David H. Autor & Susan N. Houseman & Sari Pekkala Kerr, 2017. "The Effect of Work First Job Placements on the Distribution of Earnings: An Instrumental Variable Quantile Regression Approach," Journal of Labor Economics, University of Chicago Press, vol. 35(1), pages 149-190.
    2. Annette Bernhardt & Rosemary L. Batt & Susan Houseman & Eileen Appelbaum, 2016. "Domestic Outsourcing in the United States: A Research Agenda to Assess Trends and Effects on Job Quality," Upjohn Working Papers 16-253, W.E. Upjohn Institute for Employment Research.
    3. Yang, Guanyi, 2018. "Welfare under friction and uncertainty: General equilibrium evaluation of temporary employment in the U.S," Research in Economics, Elsevier, vol. 72(3), pages 404-413.
    4. Yang, Guanyi, 2017. "General Equilibrium Evaluation of Temporary Employment," MPRA Paper 80047, University Library of Munich, Germany.
    5. Adrienne T. Edisis, 2016. "The Effect of Unemployment Insurance on Temporary Help Services Employment," Journal of Labor Research, Springer, vol. 37(4), pages 484-503, December.

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    More about this item

    Keywords

    temporary help employment; business cycle;

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J49 - Labor and Demographic Economics - - Particular Labor Markets - - - Other

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