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Temporary work agencies and equilibrium unemployment

Michael Neugart () and Donald Storrie
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Donald Storrie: Centre for European Labour Market Studies, Department of Economics, Postal: Göteborg University, Box 640, SE 405 30 GÖTEBORG

No 83, Working Papers in Economics from University of Gothenburg, Department of Economics

Abstract: A striking feature of OECD labor markets in the 1990s has been the very rapid increase of temporary agency work. We augment the equilibrium unemployment model as developed by Pissarides and Mortensen with temporary work agencies in order to focus on their role as matching intermediaries and to examine the aggregate impact on employment. Our model implies that the improvement in the matching e±ciency of agencies led to the emergence and growth of temporary agency work. We also show that temporary agency work does not necessarily crowd-out other jobs.

Keywords: temporary work agencies; matching model; equilibrium unemployment; crowding-out (search for similar items in EconPapers)
JEL-codes: E24 J23 J41 J64 (search for similar items in EconPapers)
Date: 2002-10-25
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