Temporary Work Agencies and Equilibrium Unemployment

30 Pages Posted: 17 Nov 2002

See all articles by Michael Neugart

Michael Neugart

Technical University of Darmstadt

Donald Storrie

Göteborg University - Department of Economics

Date Written: September 2002

Abstract

A striking feature of OECD labor markets in the 1990s has been the very rapid increase of temporary agency work. We augment the equilibrium unemployment model as developed by Pissarides and Mortensen with temporary work agencies in order to focus on their role as matching intermediaries and to examine the aggregate impact on employment. Our model implies that the improvement in the matching efficiency of agencies led to the emergence and growth of temporary agency work. We also show that temporary agency work does not necessarily crowd-out other jobs.

Keywords: temporary work agencies, matching model, equilibrium unemployment, crowding-out

JEL Classification: E24, J23, J41, J64

Suggested Citation

Neugart, Michael and Storrie, Donald, Temporary Work Agencies and Equilibrium Unemployment (September 2002). Available at SSRN: https://ssrn.com/abstract=339221 or http://dx.doi.org/10.2139/ssrn.339221

Michael Neugart (Contact Author)

Technical University of Darmstadt ( email )

Hochschulstraße 1
Darmstadt, 64289
Germany

HOME PAGE: http://www.vwl3.wi.tu-darmstadt.de

Donald Storrie

Göteborg University - Department of Economics ( email )

Box 640
SE 405 30 Gothenburg
Sweden

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