Does Temporary Help Work Provide a Stepping Stone to Regular Employment?

Michael Kvasnicka

in Studies of Labor Market Intermediation

Published by University of Chicago Press

Published in print December 2009 | ISBN: 9780226032887
Published online February 2013 | e-ISBN: 9780226032900 | DOI:
Does Temporary Help Work Provide a Stepping Stone to Regular Employment?

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Using employment register data from Germany, this chapter analyzes whether unemployed job-seekers who take temporary help jobs are more likely to later obtain direct-hire employment than observationally similar workers who do not take temporary help jobs. The analytical tool used in this study is a matching estimator, which identifies pairs of workers who are observationally similar up to the point where one member of the pair obtains a temporary help job. Growing attention is being paid to the potential longer-term effects of temporary help service (THS) employment on the labor market prospects of workers. Because of the strong employment record of the THS industry in Germany and the acclaimed stepping-stone function of THS work to regular employment for the jobless, restrictive provisions of the Law on Placement Activity (LoPA), which governs the operation of the German THS submarket since 1972, were increasingly relaxed during the 1990s, a process that culminated in the large-scale labor market reform legislated in late 2002. THS work appears to provide an access-to-work function for unemployed workers that leaves them with a higher probability of employment for the entire four years their subsequent labor market states have been analyzed than workers who did not join THS work, as of yet, in their unemployment spell.

Keywords: temporary help service; THS; labor market; unemployed workers; Law on Placement Activity; employment

Chapter.  15272 words.  Illustrated.

Subjects: Econometrics and Mathematical Economics

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