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On the wages of temporary help service workers in Germany

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  • Kvasnicka, Michael
  • Werwatz, Axel

Abstract

This paper produces first econometric estimates for Germany of the contemporanous wage gap associated with Temporary Help Service (THS) employment, as well as the long-term effects of THS work on the future earnings of workers. In addition, we present evidence showing that average male real earnings in the THS industry have declined by about 9% in the period 1975-1995. Our estimates of the overall and group-specific wage gaps attached to THS work are large, albeit significantly smaller than those cited in the existing descriptive literature. Moreover, we find no evidence for any discernable negative average long-term earnings effects of THS work. If anything, THS work seems to have aided workers in putting to a halt declines in their relative earnings observable before joining the THS market.

Suggested Citation

  • 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.
  • Handle: RePEc:zbw:sfb373:200270
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    References listed on IDEAS

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    1. Jacob A. Mincer, 1974. "Introduction to "Schooling, Experience, and Earnings"," NBER Chapters,in: Schooling, Experience, and Earnings, pages 1-4 National Bureau of Economic Research, Inc.
    2. 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.
    3. Lewis M. Segal & Daniel G. Sullivan, 1998. "Wage differentials for temporary services work: evidence from administrative data," Working Paper Series WP-98-23, Federal Reserve Bank of Chicago.
    4. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1, January.
    5. Lewis M. Segal & Daniel G. Sullivan, 1997. "The Growth of Temporary Services Work," Journal of Economic Perspectives, American Economic Association, vol. 11(2), pages 117-136, Spring.
    6. Bender, Stefan & Haas, Anette & Klose, Christoph, 2000. "IAB Employment Subsample 1975-1995 Opportunities for Analysis Provided by the Anonymised Subsample," IZA Discussion Papers 117, Institute for the Study of Labor (IZA).
    7. Almus, Matthias & Egeln, Jürgen & Lechner, Michael & Pfeiffer, Friedhelm & Spengler, Hannes, 1998. "Die gemeinnützige Arbeitnehmerüberlassung in Rheinland-Pfalz: Eine ökonometrische Analyse des Wiedereingliederungserfolgs," ZEW Discussion Papers 98-36, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    8. David H. Autor, 2000. "Outsourcing at Will: Unjust Dismissal Doctrine and the Growth of Temporary Help Employment," NBER Working Papers 7557, National Bureau of Economic Research, Inc.
    9. Lewis M. Segal & Daniel G. Sullivan, 1997. "Temporary services employment durations: evidence from state UI data," Working Paper Series, Macroeconomic Issues WP-97-23, Federal Reserve Bank of Chicago.
    10. 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.
    11. Lewis M. Segal & Daniel G. Sullivan, 1995. "The temporary labor force," Economic Perspectives, Federal Reserve Bank of Chicago, issue Mar, pages 2-19.
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    Citations

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    Cited by:

    1. Michael Kvasnicka, 2005. "Does Temporary Agency Work Provide a Stepping Stone to Regular Employment?," SFB 649 Discussion Papers SFB649DP2005-031, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
    2. Michael Kvasnicka, 2003. "Inside the Black Box of Temporary Help Agencies," Labor and Demography 0310003, EconWPA.
    3. Ammermüller, Andreas & Boockmann, Bernhard & Garloff, Alfred & Kuckulenz, Anja & Spermann, Alexander, 2003. "Die ZEW-Erhebung bei Zeitarbeitsbetrieben: Dokumentation der Umfrage und Ergebnisse von Analysen," ZEW Dokumentationen 03-07, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    4. Michael C. Burda & Michael Kvasnicka, 2006. "Zeitarbeit in Deutschland: Trends und Perspektiven," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 7(2), pages 195-225, May.
    5. 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).
    6. 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.
    7. 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.
    8. Jahn, Elke J., 2008. "Reassessing the Wage Penalty for Temps in Germany," IZA Discussion Papers 3663, Institute for the Study of Labor (IZA).

    More about this item

    Keywords

    temporary help services; wage differential; long-term earnings;

    JEL classification:

    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J40 - Labor and Demographic Economics - - Particular Labor Markets - - - General

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