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

Elke Jahn and Michael Rosholm ()

European Economic Review, 2014, vol. 65, issue C, 108-125

Abstract: We perform a comprehensive analysis of the stepping-stone effect of temporary agency employment on unemployed workers. Using the timing-of-events approach, we investigate not only whether agency employment is a bridge into regular employment but also its effect on post-unemployment wages and job stability for unemployed Danish workers. We find evidence of large positive treatment effects, particularly for immigrants and for individuals considered less employable. Our results show that agency employment is in tendency effective in tight labor markets, where firms use agency employment primarily to screen potential candidates for regular posts. Finally, our results suggest that agency employment may improve subsequent match quality in terms of wages.

Keywords: Temporary agency employment; Stepping stone; Employment stability; Wages (search for similar items in EconPapers)
JEL-codes: C41 J64 J30 J40 (search for similar items in EconPapers)
Date: 2014
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