Do Temporary Help Agencies Help? Employment Transitions for Low-Skilled Workers Articles uri icon

publication date

  • June 2024

start page

  • 1

end page

  • 11

issue

  • 102586

volume

  • 90

International Standard Serial Number (ISSN)

  • 0927-5371

Electronic International Standard Serial Number (EISSN)

  • 1879-1034

abstract

  • We investigate the impact of working for a temporary help agency (THA) compared to being directly
    hired on the employment transitions of low-skilled male temporary workers aged 20 to 45. Using data from Spanish administrative records, we employ competing risk discrete-time duration models to analyze multiple temporary employment spells. Our analysis reveals the importance of accounting for short-duration dependence and workers¿ unobserved heterogeneity. We find that, across all durations, agency workers are
    more likely to transition either to unemployment or to a new THA contract than their direct-hire counterparts.
    Transitions to permanent positions, although infrequent in our sample, are also more likely for agency workers.
    Our qualitative findings hold when unobserved heterogeneity is not controlled for. However, this model
    underestimates the effect of agency contracts on the risk of entering unemployment and overestimates the
    impact on the probability of re-entering THA. This suggests that positive self-selection plays a relevant role in
    explaining the higher persistence of THA employment, but not the associated higher risk of unemployment.

subjects

  • Economics

keywords

  • temporary help agencies; temporary contracts; competing risk duration models; unobserved heterogeneity