Identifying the Substitution Effect of Temporary Agency Employment
Elke J. Jahn
Government of the Federal Republic of Germany - Institute for Employment Research (IAB); University of Aarhus - Business and Social Sciences; Institute for the Study of Labor (IZA); University of Erlangen-Nuremberg - Department of Economics
University of Regensburg; Government of the Federal Republic of Germany - Institute for Employment Research (IAB); Osteuropa-Institut (OEI)
IZA Discussion Paper No. 6471
This paper fills a gap in the literature by investigating whether temporary agency employment substitutes regular employment. To take into account the interaction between the two employment forms, we identify a SVAR model with correlated innovations by volatility regimes. We show that a positive shock to temporary agency employment increases overall employment, but also leads to substitution of regular jobs.
Number of Pages in PDF File: 10
Keywords: temporary agency employment, substitution effect, Germany
JEL Classification: C32, J21, J41working papers series
Date posted: April 14, 2012
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