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Identifying the Substitution Effect of Temporary Agency Employment

Author

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  • Jahn, Elke J.

    (University of Bayreuth)

  • Weber, Enzo

    (Institute for Employment Research (IAB), Nuremberg)

Abstract

This paper fills a gap in the literature by investigating whether temporary agency employment substitutes regular employment. To take into account the interaction between the two employment forms, we identify a SVAR model with correlated innovations by volatility regimes. We show that a positive shock to temporary agency employment increases overall employment, but also leads to substitution of regular jobs.

Suggested Citation

  • Jahn, Elke J. & Weber, Enzo, 2012. "Identifying the Substitution Effect of Temporary Agency Employment," IZA Discussion Papers 6471, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp6471
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    References listed on IDEAS

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    1. Antoni, Manfred & Jahn, Elke J., 2006. "Do Changes in Regulation Affect Employment Duration in Temporary Work Agencies?," IZA Discussion Papers 2343, Institute of Labor Economics (IZA).
    2. Boeri, Tito, 2011. "Institutional Reforms and Dualism in European Labor Markets," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 13, pages 1173-1236, Elsevier.
    3. Sentana, Enrique & Fiorentini, Gabriele, 2001. "Identification, estimation and testing of conditionally heteroskedastic factor models," Journal of Econometrics, Elsevier, vol. 102(2), pages 143-164, June.
    4. David H. Autor & Susan N. Houseman, 2010. "Do Temporary-Help Jobs Improve Labor Market Outcomes for Low-Skilled Workers? Evidence from "Work First"," American Economic Journal: Applied Economics, American Economic Association, vol. 2(3), pages 96-128, July.
    5. Enzo Weber, 2010. "Structural Conditional Correlation," Journal of Financial Econometrics, Oxford University Press, vol. 8(3), pages 392-407, Summer.
    6. Lanne, Markku & Lütkepohl, Helmut, 2010. "Structural Vector Autoregressions With Nonnormal Residuals," Journal of Business & Economic Statistics, American Statistical Association, vol. 28(1), pages 159-168.
    7. Kahn, Lawrence M., 2010. "Employment protection reforms, employment and the incidence of temporary jobs in Europe: 1996-2001," Labour Economics, Elsevier, vol. 17(1), pages 1-15, January.
    8. Jahn, Elke J., 2008. "Reassessing the Wage Penalty for Temps in Germany," IZA Discussion Papers 3663, Institute of Labor Economics (IZA).
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Elke Jahn & Enzo Weber, 2016. "The effect of temporary help jobs on employment volatility," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 49(1), pages 412-427, February.
    2. Bachmann, Ronald & Martinez Flores, Fernanda & Rulff, Christian, 2022. "Die Lohnlücke in der Zeitarbeit: Eine empirische Analyse auf Grundlage von BA-Daten und der Verdienststrukturerhebung," RWI Projektberichte, RWI - Leibniz-Institut für Wirtschaftsforschung, number 262219.
    3. Beissinger, Thomas & Baudy, Philipp, 2015. "The Impact of Temporary Agency Work on Trade Union Wage Setting: A Theoretical Analysis," IZA Discussion Papers 8802, Institute of Labor Economics (IZA).
    4. Paolo Barbieri & Giorgio Cutuli, 2018. "Dual Labour Market Intermediaries in Italy: How to Lay off “Lemons”—Thereby Creating a Problem of Adverse Selection," De Economist, Springer, vol. 166(4), pages 477-502, December.
    5. Daniel J. Lewis, 2022. "Robust Inference in Models Identified via Heteroskedasticity," The Review of Economics and Statistics, MIT Press, vol. 104(3), pages 510-524, May.
    6. Bachmann, Ronald & Martinez Flores, Fernanda & Rulf, Christian, 2022. "Die Lohnlücke in der Zeitarbeit: Eine empirische Analyse auf Grundlage der Integrierten Erwerbsbiografien und der Verdienststrukturerhebung," RWI Materialien 153, RWI - Leibniz-Institut für Wirtschaftsforschung.
    7. Werner Eichhorst & Michela Braga & Andrea Broughton & An de Coen & Henri Culot & Filip Dorssemont & Ulrike Famira-Mühlberger & Maarten Gerard & Ulrike Huemer & Michael J. Kendzia & Jakob Louis Pederse, 2013. "The Role and Activities of Employment Agencies," WIFO Studies, WIFO, number 46987.
    8. Jahn, Elke & Weber, Enzo, 2013. "Zeitarbeit: Zusätzliche Jobs, aber auch Verdrängung (The substitution effect of temporary agency employment)," IAB-Kurzbericht 201302, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].

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    More about this item

    Keywords

    substitution effect; temporary agency employment; Germany;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts

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