Do Changes in Regulation Affect Employment Duration in Temporary Help Agencies?

Abstract

The employment duration of workers in temporary help agencies is seen as an important indicator of their job quality. Most of the countries that regulate temporary agency employment do so to ensure at least a minimal level of employment stability. Over the past three decades Germany has repeatedly liberalized the law on temporary agency employment. These successive reforms should have affected the employment duration in the temporary employment sector. Applying a mixed proportional hazard rate model to administrative data, the authors examine whether employment duration changed in response to these reforms. They find that successive extensions of the maximum assignment period significantly increased average employment duration, while “liberalizing” legislation, such as that allowing fixed-term contracts, tended to reduce it.

Organizational commitment and the well-being of temporary agency workers: A longitudinal study

“…One reason why flexibility is not often mentioned could be that flexibility, that is, with regard to part-time work arrangements as they are known (e.g. from the UK and the Netherlands) are rare in Germany, where the usual contract is on a full-time basis (Antoni & Jahn, 2006).…”

Looking beyond the bridge: The effect of temporary agency employment on labor market outcomes

“…Third, unemployed job-seekers often try to escape unemployment by upgrading their education, but do temp work at the same time to augment their income. Since their motivation might not be primarily to find employment outside the 6 For Germany, Antoni and Jahn (2009) provide evidence that permanent agency staff members account for about 7 percent of the stock of all workers identified as temp workers via the industry classification code. In the inflow to temp jobs from unemployment, this ratio is likely to be considerably lower, since the staff of temp agencies obviously experience fewer transitions into and out of jobs than the temp workers themselves.…”

TFP, Labor Productivity and the (Un)Observed Labor Input: Temporary Agency Work

“…2 The growing importance of TAW is inspiring a large and growing literature on the different aspects of temporary agency work. Inter alia, several studies show that there is a significant wage gap between TAW and regular employees, albeit varying in size (Jahn, 2010;Antoni & Jahn, 2009;Oberst, et al, 2008;Houseman, et al, 2003;Jahn & Rudolph, 2002). This points to potential cost savings for firms, often seen as the main incentive to use TAW (Bryson, 2013;Heywood, et al, 2011;Kleinknecht, et al, 2006;Houseman, et al, 2003).…”

“…For more information see Zühlke et al (2004) It is often observed that TAW earn less than their colleagues with open-end contracts (Jahn, 2010;Antoni & Jahn, 2009;Houseman, et al, 2003;Jahn & Rudolph, 2002). However, this does not necessarily mean that the costs for the customer firms are lower when they use TAW instead of permanent employees.…”

“…This, however, might lead to an underestimation of TAW usage because firms might report having no agency workers on the very specific June 30 th , but they might actually have used some, many or few, before or after that day. This is very likely due to the short term nature of temporary agency work (Schmidt & Wüllerich, 2011;Antoni & Jahn, 2009). 32 In addition, because data on sales refer to the entire year, there is the possibility that the effect of TAW is not fully captured.…”