The Impact of a Demand Shock on the Employment of Temporary Agency Workers: Evidence from Japan during the global financial crisis

Kaoru Hosono, Miho Takizawa and Kotaro Tsuru

Discussion papers from Research Institute of Economy, Trade and Industry (RIETI)

Abstract: This study investigates the effect of a negative demand shock on the composition of the type of workers at firms, focusing on the change in the share of temporary agency in all workers. To clearly identify the causal link between the demand a firm faces and the composition of its workforce in terms of the type of workers and rule out any reverse causation, we use the 2007-2009 global financial crisis as a natural experiment, with the drop in demand experienced by exporting firms in Japan serving as an exogenous demand shock. We find that firms with a higher export ratio, a higher share of temporary agency workers, and a larger increase in the share of temporary agency worker ratio prior to the crisis decreased the share of temporary agency workers more than other firms in response to the demand shock. We also find that firms with a higher liquid asset ratio and higher volatility in their sales decreased the share of temporary agency workers less than other firms during the crisis. These results suggest that temporary agency workers serve as a buffer against demand shocks.

Pages: 15 pages
Date: 2014-08
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.rieti.go.jp/jp/publications/dp/14e046.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eti:dpaper:14046

Access Statistics for this paper

More papers in Discussion papers from Research Institute of Economy, Trade and Industry (RIETI) Contact information at EDIRC.
Bibliographic data for series maintained by TANIMOTO, Toko ().