The Cyclicality of the Stepping Stone Effect of Temporary Agency Employment

Elke Jahn and Michael Rosholm

VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy from Verein für Socialpolitik / German Economic Association

Abstract: This paper investigates whether the stepping stone effect of temporary agency employment moves over the business cycle. Using German administrative data for the period 1985-2012 and an estimation framework based on the timing-events model, we construct a time series of in-treatment and post-treatment effects and estimate their relationship to the aggregate unemployment rate. We find evidence for a strong lock-in effect of temporary agency employment that is even more pronounced in tight labor markets. This suggests that firms do not use agency employment as a screening device when unemployment is low. Moreover, we find a noticeable countercyclical positive post-treatment effect indicating that workers might be able to activate networks established while being in treatment. We further document that the treatment effects are non-linear over the business cycle.

JEL-codes: C41 J40 J64 (search for similar items in EconPapers)
Date: 2015
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https://www.econstor.eu/bitstream/10419/113117/1/VfS_2015_pid_163.pdf (application/pdf)

Related works:
Working Paper: The Cyclicality of the Stepping-Stone Effect of Temporary Agency Employment (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc15:113117

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