What Drives the Demand for Temporary Agency Workers?

Elke Jahn and Jan Bentzen

No 5333, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Temporary agency employment has grown steadily in most European countries over the past three decades as part of the general trend towards increased employment flexibility. Yet to this day, it remains an open question what drives the demand for temporary agency workers. The paper examines, first, whether the deregulation of temporary agency employment is responsible for the growth of the flexible staffing industry. Second, we investigate the cyclical behavior of temporary agency employment. Using monthly data for Germany covering the period 1973-2008, we show that the continuous liberalization of this sector is not responsible for the surge in temporary agency employment. Our analysis reveals, moreover, that temporary agency employment exhibits strong cyclical behavior and correlates with main economic indicators in real time. Since most European countries promoted the use of temporary agency employment in a similar way, we believe that our results may be interesting from an international perspective as well.

Keywords: business cycle; temporary agency employment; labor law; regulation (search for similar items in EconPapers)
JEL-codes: C41 J23 J40 J48 K31 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2010-11
New Economics Papers: this item is included in nep-bec, nep-eur and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Published - published in: LABOUR, 2012, 26 (3), 341-355

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