Temporary work agencies and equilibrium unemployment

Michael Neugart and Donald Storrie

No FS I 02-203, Discussion Papers, Research Unit: Labor Market Policy and Employment from WZB Berlin Social Science Center

Abstract: During the 1990s, temporary agency work has increased rapidly in most OECD countries. We augment the equilibrium unemployment model developed by Pissarides and Mortensen with temporary work agencies. Our model implies that technological improvements for placements and de-regulation of the sector caused the emergence and growth of temporary agency work. Simulations of a calibrated version of the model show that `temp' work does not necessarily crowd out other, 'regular' jobs.

Date: 2002
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Working Paper: Temporary work agencies and equilibrium unemployment (2002)
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