Dual Labour Markets at Work: The Impact of Employers' Use of Temporary Agency Work on Regular Workers' Job Stability

Boris Hirsch

No 8804, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Fitting duration models on an inflow sample of jobs in Germany starting in 2002-2010, this paper investigates the impact of employers' use of temporary agency work on regular workers' job stability. In line with dual labour market theory, I find that non-temp jobs are significantly more stable if employers utilise temps. The rise in job stability stems mainly from reduced transitions into non-employment suggesting that non-temp workers are safeguarded against involuntary job losses. My findings are robust to controlling for unobserved permanent employer characteristics and changes in the observational window that includes the labour market disruption of the Great Recession.

Keywords: dual labour markets; job stability; temporary agency work (search for similar items in EconPapers)
JEL-codes: J21 J41 J63 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2015-01
New Economics Papers: this item is included in nep-lab and nep-lma
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Forthcoming - published in: Industrial and Labor Relations Review, 2016, 69 (5), 1191-1215

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Working Paper: Dual labour markets at work: The impact of employers' use of temporary agency work on regular workers' job stability (2015)
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