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On the Wages of Temporary Help Service Workers in Germany

Author

Listed:
  • Michael Kvasnicka

    (Humboldt-University Berlin)

  • Axel Werwatz

    (German Institute for Economic Research)

Abstract
This paper produces first econometric estimates for Germany of the contemporanous wage gap associated with Temporary Help Service (THS) employment, as well as the long-term effects of THS work on the future earnings of workers. In addition, we present evidence showing that average male real earnings in the THS industry have declined by about 9% in the period 1975-1995. Our estimates of the overall and group-specific wage gaps attached to THS work are large, albeit significantly smaller than those cited in the existing descriptive literature. Moreover, we find no evidence for any discernable negative average long-term earnings e¤ects of THS work. If anything, THS work seems to have aided workers in putting to a halt declines in their relative earnings observable before joining the THS market.

Suggested Citation

  • Michael Kvasnicka & Axel Werwatz, 2003. "On the Wages of Temporary Help Service Workers in Germany," Labor and Demography 0309004, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpla:0309004
    Note: Type of Document - PDF; pages: 32 ; figures: included. This paper appeared in the discussion paper series of the Sonderforschungsbereich 373 at Humboldt-University Berlin in the summer of 2002. An updated version can be obtained from the authors upon request.
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    References listed on IDEAS

    as
    1. Susan N. Houseman, 2001. "Why Employers Use Flexible Staffing Arrangements: Evidence from an Establishment Survey," ILR Review, Cornell University, ILR School, vol. 55(1), pages 149-170, October.
    2. Jacob A. Mincer, 1974. "Introduction to "Schooling, Experience, and Earnings"," NBER Chapters, in: Schooling, Experience, and Earnings, pages 1-4, National Bureau of Economic Research, Inc.
    3. David H. Autor, 2001. "Why Do Temporary Help Firms Provide Free General Skills Training?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 116(4), pages 1409-1448.
    4. Lewis M. Segal & Daniel G. Sullivan, 1998. "Wage differentials for temporary services work: evidence from administrative data," Working Paper Series WP-98-23, Federal Reserve Bank of Chicago.
    5. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1.
    6. Lee, Lung-Fei, 1978. "Unionism and Wage Rates: A Simultaneous Equations Model with Qualitative and Limited Dependent Variables," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 19(2), pages 415-433, June.
    7. Lewis M. Segal & Daniel G. Sullivan, 1997. "The Growth of Temporary Services Work," Journal of Economic Perspectives, American Economic Association, vol. 11(2), pages 117-136, Spring.
    8. Bender, Stefan & Haas, Anette & Klose, Christoph, 2000. "IAB Employment Subsample 1975-1995 Opportunities for Analysis Provided by the Anonymised Subsample," IZA Discussion Papers 117, Institute of Labor Economics (IZA).
    9. Almus, Matthias & Egeln, Jürgen & Lechner, Michael & Pfeiffer, Friedhelm & Spengler, Hannes, 1998. "Die gemeinnützige Arbeitnehmerüberlassung in Rheinland-Pfalz: Eine ökonometrische Analyse des Wiedereingliederungserfolgs," ZEW Discussion Papers 98-36, ZEW - Leibniz Centre for European Economic Research.
    10. David H. Autor, 2000. "Outsourcing at Will: Unjust Dismissal Doctrine and the Growth of Temporary Help Employment," NBER Working Papers 7557, National Bureau of Economic Research, Inc.
    11. Lewis M. Segal & Daniel G. Sullivan, 1997. "Temporary services employment durations: evidence from state UI data," Working Paper Series, Macroeconomic Issues WP-97-23, Federal Reserve Bank of Chicago.
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    13. Susan N. Houseman & Arne L. Kalleberg & George A. Erickcek, 2001. "The Role of Temporary Help Employment in Tight Labor Markets," Upjohn Working Papers 01-73, W.E. Upjohn Institute for Employment Research.
    14. Lewis M. Segal & Daniel G. Sullivan, 1995. "The temporary labor force," Economic Perspectives, Federal Reserve Bank of Chicago, vol. 19(Mar), pages 2-19.
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    Cited by:

    1. Kvasnicka, Michael, 2003. "Inside The Black Box of Temporary Help Agencies," SFB 373 Discussion Papers 2003,43, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
    2. repec:hum:wpaper:sfb649dp2005-031 is not listed on IDEAS
    3. Ammermüller, Andreas & Boockmann, Bernhard & Garloff, Alfred & Kuckulenz, Anja & Spermann, Alexander, 2003. "Die ZEW-Erhebung bei Zeitarbeitsbetrieben: Dokumentation der Umfrage und Ergebnisse von Analysen," ZEW Dokumentationen 03-07, ZEW - Leibniz Centre for European Economic Research.
    4. Michael C. Burda & Michael Kvasnicka, 2006. "Zeitarbeit in Deutschland: Trends und Perspektiven," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 7(2), pages 195-225, May.
    5. Kvasnicka, Michael, 2005. "Does temporary agency work provide a stepping stone to regular employment?," SFB 649 Discussion Papers 2005-031, Humboldt University Berlin, Collaborative Research Center 649: Economic Risk.
    6. Marcel GARZ, 2013. "Employment and wages in Germany since the 2004 deregulation of the temporary agency industry," International Labour Review, International Labour Organization, vol. 152(2), pages 307-326, June.
    7. Andersson Joona, Pernilla & Wadensjö, Eskil, 2012. "A Price for Flexibility? The Temp Agency Wage Gap in Sweden 1998-2008," IZA Discussion Papers 6587, Institute of Labor Economics (IZA).
    8. Michael Kvasnicka, 2009. "Does Temporary Help Work Provide a Stepping Stone to Regular Employment?," NBER Chapters, in: Studies of Labor Market Intermediation, pages 335-372, National Bureau of Economic Research, Inc.
    9. Jahn Elke J., 2010. "Reassessing the Pay Gap for Temps in Germany," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 230(2), pages 208-233, April.
    10. Jahn, Elke J., 2008. "Reassessing the Wage Penalty for Temps in Germany," IZA Discussion Papers 3663, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    temporary help services agency work wages;

    JEL classification:

    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J40 - Labor and Demographic Economics - - Particular Labor Markets - - - General

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