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Temporary agency work and the user firm's productivity: First evidence from German Panel Data

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  • Hirsch, Boris
  • Mueller, Steffen

Abstract

This paper investigates the relationship between the use of temporary agency work and the user firm's productivity. We hypothesise that modest use enhances numerical flexibility and thus productivity, while excessive use mirrors lowproductivity strategies utilising less social and human capital and primarily aims at circumventing labour market regulations. In contrast to the sparse existing literature on this issue, we apply a large panel data set and fixed effects techniques. We find a robust hump-shaped relationship between the extent of temporary agency work use and the user firm's productivity, which corroborates our hypotheses.

Suggested Citation

  • Hirsch, Boris & Mueller, Steffen, 2010. "Temporary agency work and the user firm's productivity: First evidence from German Panel Data," Discussion Papers 68, Friedrich-Alexander University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
    • Handle: RePEc:zbw:faulre:68
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    References listed on IDEAS

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    1. Alexander Mosthaf & Thorsten Schank & Claus Schnabel, 2014. "Low-wage employment versus unemployment: Which one provides better prospects for women?," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-17, December.
    2. Uwe Blien & Wolfgang Dauth & Thorsten Schank & Claus Schnabel, 2013. "The Institutional Context of an ‘Empirical Law’: The Wage Curve under Different Regimes of Collective Bargaining," British Journal of Industrial Relations, London School of Economics, vol. 51(1), pages 59-79, March.
    3. John T. Addison & Claus Schnabel, 2011. "Worker Directors: A German Product that Did Not Export?," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 50(2), pages 354-374, April.
    4. Michael Moritz, 2011. "Spatial effects of open borders on the Czech labour market," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 19(2), pages 305-331, April.
    5. List, Juliane & Schnabel, Claus & Klaus, Anton, 2010. "Erfolg und Misserfolg bei der Ausbildungsplatzsuche: Eine empirische Untersuchung von Hauptschülern im Landkreis Nürnberger Land," Discussion Papers 67, Friedrich-Alexander University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
    6. Mosthaf, Alexander & Schnabel, Claus & Stephani, Jens, 2011. "Low-wage careers: Are there dead-end firms and dead-end jobs?," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 43(3), pages 231-249.
    7. Hirsch, Boris & Schank, Thorsten & Schnabel, Claus, 2009. "Work councils and separations: voice, monopoly, and insurance effects," Discussion Papers 62, Friedrich-Alexander University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
    8. Sven Jung & Claus Schnabel, 2011. "Paying More than Necessary? The Wage Cushion in Germany," LABOUR, CEIS, vol. 25(2), pages 182-197, June.
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    Cited by:

    1. Sebastian Nielen & Alexander Schiersch, 2014. "Temporary Agency Work and Firm Competitiveness: Evidence from German Manufacturing Firms," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 53(3), pages 365-393, July.
    2. Beckmann, Michael & Kuhn, Dieter, 2012. "Flexibility vs. screening : the performance effects of temporary agency work strategies," Working papers 2012/03, Faculty of Business and Economics - University of Basel.
    3. William Addessi & Enrico Saltari & Riccardo Tilli, 2011. "R&D and Innovation Activities and the Use of External NumericalFlexibility," Working Papers in Public Economics 150, Department of Economics and Law, Sapienza University of Roma.

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    More about this item

    Keywords

    temporary agency work; firm productivity; flexible labour;
    All these keywords.

    JEL classification:

    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production

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