Are Temporary Work Agency Jobs Stepping Stones? Exploiting Variation in the Timing of Bankruptcy

Ron Diris (), Jordy Meekes () and Olaf van Vliet ()
Additional contact information
Ron Diris: Leiden University
Jordy Meekes: Leiden University
Olaf van Vliet: Leiden University

No 18959, IZA Discussion Papers from IZA Network @ LISER

Abstract: This study analyses whether temporary work agency (TWA) employment is a stepping stone to better labour market outcomes for displaced workers. Using monthly Dutch administrative data for the period 2010-2022, we focus on a sample of incumbent employees who are displaced because of a firm bankruptcy, and analyse the causal effect of the first job after displacement being a TWA job vs. another job. The main contribution of this study is that we exploit variation in firm bankruptcy dates in a novel instrumental variable approach to deal with the endogeneity of TWA employment. We find that TWA causes negative effects on employment and working hours, which dissipate around 30 months after firm bankruptcy. Effects on hourly wages are negative (20\%) and consistent up until seven years after firm bankruptcy. TWA employment also reduces the probability of having a permanent contract by around 20 percentage points in the long run.

Keywords: temporary work agency; stepping stone; labour market flexibilization; instrumental variables; displaced workers (search for similar items in EconPapers)
JEL-codes: J31 J64 (search for similar items in EconPapers)
Date: 2026-09
References: Add references at CitEc
Citations:

Downloads: (external link)
https://docs.iza.org/dp18959.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:iza:izadps:dp18959

Access Statistics for this paper

More papers in IZA Discussion Papers from IZA Network @ LISER Contact information at EDIRC.
Bibliographic data for series maintained by Mark Fallak ().