Looking Beyond the Bridge: How Temporary Agency Employment Affects Labor Market Outcomes

38 Pages Posted: 29 Jun 2010

See all articles by Elke J. Jahn

Elke J. Jahn

Institute for Employment Research (IAB); University of Bayreuth; IZA Institute of Labor Economics

Michael Rosholm

Aarhus University - Department of Economics and Business Economics; IZA Institute of Labor Economics; Amternes og Kommunernes Forskningsinstitut (AKF)

Abstract

We perform a comprehensive analysis of the stepping-stone effect of temporary agency employment on unemployed workers. Using the timing-of-events approach, we not only investigate whether agency employment is a bridge into regular employment but also analyze its effect on post-unemployment wages and job stability for unemployed Danish workers. We find evidence of large positive treatment effects, particularly for immigrants. There is also some indication that higher treatment intensity increases the likelihood of leaving unemployment for regular jobs. Our results show that agency employment is even more effective in tight labor markets, where firms use agency employment primarily to screen potential candidates for permanent posts. Finally, our results suggest that agency employment may improve subsequent match quality in terms of wages and job duration.

Keywords: temporary agency employment, stepping stone, employment stability, wages

JEL Classification: C41, J64, J30, J40

Suggested Citation

Jahn, Elke J. and Rosholm, Michael, Looking Beyond the Bridge: How Temporary Agency Employment Affects Labor Market Outcomes. IZA Discussion Paper No. 4973, Available at SSRN: https://ssrn.com/abstract=1631108

Elke J. Jahn (Contact Author)

Institute for Employment Research (IAB) ( email )

Regensburger Str. 104
Nuremberg, 90478
Germany

University of Bayreuth ( email )

Bayreuth, 95447
Germany

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Michael Rosholm

Aarhus University - Department of Economics and Business Economics ( email )

Fuglesangs Allé 4
Aarhus V
Denmark
+45 89 42 15 59 (Phone)
+45 86 13 63 34 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Amternes og Kommunernes Forskningsinstitut (AKF)

Nyropsgade 37
Copenhagen, DK-1602
Denmark

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
128
Abstract Views
1,128
rank
267,647
PlumX Metrics