Dual Labour Markets at Work: The Impact of Employers' Use of Temporary Agency Work on Regular Workers' Job Stability

30 Pages Posted: 14 Feb 2015

See all articles by Boris Hirsch

Boris Hirsch

University of Erlangen-Nuremberg

Abstract

Fitting duration models on an inflow sample of jobs in Germany starting in 2002-2010, this paper investigates the impact of employers' use of temporary agency work on regular workers' job stability. In line with dual labour market theory, I find that non-temp jobs are significantly more stable if employers utilise temps. The rise in job stability stems mainly from reduced transitions into non-employment suggesting that non-temp workers are safeguarded against involuntary job losses. My findings are robust to controlling for unobserved permanent employer characteristics and changes in the observational window that includes the labour market disruption of the Great Recession.

Keywords: temporary agency work, job stability, dual labour markets

JEL Classification: J63, J41, J21

Suggested Citation

Hirsch, Boris, Dual Labour Markets at Work: The Impact of Employers' Use of Temporary Agency Work on Regular Workers' Job Stability. IZA Discussion Paper No. 8804, Available at SSRN: https://ssrn.com/abstract=2564937 or http://dx.doi.org/10.2139/ssrn.2564937

Boris Hirsch (Contact Author)

University of Erlangen-Nuremberg ( email )

Schloßplatz 4
Erlangen, DE Bavaria 91054
Germany

HOME PAGE: http://www.arbeitsmarkt.wiso.uni-erlangen.de/english/hirsch_e.htm

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