Reassessing the Wage Penalty for Temps in Germany

Elke Jahn

No 3663, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: As a consequence of the rapid growth of temporary agency employment in Germany, the debate on the poor working conditions of temps, specifically their remuneration, has intensified recently. Using administrative data, the paper shows that the wage gap for German temp workers is rather large and varies between occupation and region. But temps already suffer from a marked wage decline before entering the temporary help sector. Nevertheless, temporary agency employment does not leave a long lasting scar. Two years after leaving the sector, temps no longer suffer from a wage penalty. A recent change in the law set a high incentive for temporary help agencies to pay their workers according to a sectoral collective agreement. Surprisingly, the unionization of the sector could not bring the widening wage gap to a halt.

Keywords: temporary agency employment; wage differential; earnings; Germany; reform (search for similar items in EconPapers)
JEL-codes: J30 J31 J42 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2008-08
New Economics Papers: this item is included in nep-eec and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

Published - published in: Jahrbücher für Nationalökonomie und Statistik, 2010, 230 (2), 208-233

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