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Are temporary work agencies stepping stones into regular employment?

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  • Joakim Hveem

Abstract

This paper estimates the causal effect of temporary work agency (TWA) employment on the subsequent probability of employment in the regular labor market. The main purpose is to estimate the stepping-stone effect separately for natives and immigrants, where the latter group potentially benefits the most from TWA employment. Since no quasi-experiment is available, individual Differences-in-Differences and matching is used to deal with the potential selection bias. The results point at a negative regular employment effect, which slowly fades away over a couple of years. Thus no evidence of a stepping-stone effect is found. When conditioning on immigrants, this negative effect is absent. A long-run significant effect is found on overall employment probability (including TWA employment), there is even a long-run positive effect on annual earnings (mainly driven by women). Unemployment probabilities decreased, however the results in the estimation were less stable over time compared to the employment estimates, suggesting that the TWAs might keep individuals from exiting the labor market. Copyright Hveem; licensee Springer. 2013

Suggested Citation

  • Joakim Hveem, 2013. "Are temporary work agencies stepping stones into regular employment?," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-27, December.
    • Handle: RePEc:spr:izamig:v:2:y:2013:i:1:p:1-27:10.1186/2193-9039-2-21
    DOI: 10.1186/2193-9039-2-21
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    References listed on IDEAS

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    8. Jahn, Elke J., 2008. "Reassessing the Wage Penalty for Temps in Germany," IZA Discussion Papers 3663, Institute of Labor Economics (IZA).
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    Cited by:

    1. Jahn, Elke Jutta & Rosholm, Michael, 2015. "The Cyclicality of the Stepping Stone Effect of Temporary Agency Employment," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113117, Verein für Socialpolitik / German Economic Association.
    2. Matteo Picchio & Mattia Filomena, 2021. "Are Temporary Jobs Stepping Stones Or Dead Ends? A Meta-Analytical Review Of The Literature," Working Papers 455, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
    3. Hammer, Luisa & Hertweck, Matthias Sebastian, 2022. "EU Enlargement and (Temporary) Migration: Effects on Labour Market Outcomes in Germany," VfS Annual Conference 2022 (Basel): Big Data in Economics 264082, Verein für Socialpolitik / German Economic Association.
    4. Neumann, Uwe, 2017. "Temporary agency employment in Germany: A strategic "buffer" for firms and regions in the crisis?," Ruhr Economic Papers 727, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    5. Jahn, Elke, 2016. "Brückeneffekte für Ausländer am Arbeitsmarkt: Zeitarbeit kann Perspektiven eröffnen (Is temporary agency employment a bridge to regular employment for immigrants in Germany?)," IAB-Kurzbericht 201619, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].

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