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http://ssrn.com/abstract=842476
 
 

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Temporary Agency Employment as a Way Out of Poverty?


David Autor


Massachusetts Institute of Technology (MIT) - Department of Economics; Institute for the Study of Labor (IZA); National Bureau of Economic Research (NBER)

Susan N. Houseman


W.E. Upjohn Institute for Employment Research

November 2005

NBER Working Paper No. w11742

Abstract:     
The high incidence of temporary agency employment among participants in government employment programs has catalyzed debate about whether these jobs help the poor transition into stable employment and out of poverty. We provide direct evidence on this question through analysis of a Michigan welfare-to-work program in which program participants were randomly allocated across service providers ('contractors') with different job placement practices. We draw on a telephone survey of contractors and on administrative program data linked with wage records data on all participants entering the program over a three-and-a half-year period. Our survey evidence documents a consensus among contractors that temporary help jobs are generally easier for those with weak skills and experience to obtain, but no consensus on whether temporary help jobs confer long-term benefits to participants. Our analysis of the quasi-experimental data introduced in Autor and Houseman (2005) shows that placing participants in either temporary or direct-hire jobs improves their odds of leaving welfare and escaping poverty in the short term. However, we find that only direct-hire placements help reduce welfare dependency over longer time horizons. Our findings raise questions about the incentive structure of many government employment programs that emphasize rapid placement of program participants into jobs and that may inadvertently encourage high placement rates with temporary help agencies.

Number of Pages in PDF File: 40

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Date posted: January 30, 2006  

Suggested Citation

Autor, David and Houseman, Susan N., Temporary Agency Employment as a Way Out of Poverty? (November 2005). NBER Working Paper No. w11742. Available at SSRN: http://ssrn.com/abstract=842476

Contact Information

David Autor (Contact Author)
Massachusetts Institute of Technology (MIT) - Department of Economics ( email )
50 Memorial Drive
Room E52-371
Cambridge, MA 02142-1347
United States
617-258-7698 (Phone)
617-253-1330 (Fax)
HOME PAGE: http://web.mit.edu/dautor/www
Institute for the Study of Labor (IZA)
P.O. Box 7240
Bonn, D-53072
Germany

National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Susan N. Houseman
W.E. Upjohn Institute for Employment Research ( email )
300 South Westnedge Avenue
Kalamazoo, MI 49007-4686
United States
616-343-5541 (Phone)
616-343-3308 (Fax)
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