What Drives the Demand for Temporary Agency Workers?

23 Pages Posted: 29 Nov 2010

See all articles by Elke J. Jahn

Elke J. Jahn

Institute for Employment Research (IAB); University of Bayreuth; IZA Institute of Labor Economics

Jan Bentzen

affiliation not provided to SSRN

Multiple version iconThere are 2 versions of this paper


Temporary agency employment has grown steadily in most European countries over the past three decades as part of the general trend towards increased employment flexibility. Yet to this day, it remains an open question what drives the demand for temporary agency workers. The paper examines, first, whether the deregulation of temporary agency employment is responsible for the growth of the flexible staffing industry. Second, we investigate the cyclical behavior of temporary agency employment. Using monthly data for Germany covering the period 1973-2008, we show that the continuous liberalization of this sector is not responsible for the surge in temporary agency employment. Our analysis reveals, moreover, that temporary agency employment exhibits strong cyclical behavior and correlates with main economic indicators in real time. Since most European countries promoted the use of temporary agency employment in a similar way, we believe that our results may be interesting from an international perspective as well.

Keywords: business cycle, labor law, temporary agency employment, regulation

JEL Classification: C41, J23, J40, J48, K31

Suggested Citation

Jahn, Elke J. and Bentzen, Jan, What Drives the Demand for Temporary Agency Workers?. Available at SSRN: https://ssrn.com/abstract=1716128 or http://dx.doi.org/10.2139/ssrn.1716128

Elke J. Jahn (Contact Author)

Institute for Employment Research (IAB) ( email )

Regensburger Str. 104
Nuremberg, 90478

University of Bayreuth ( email )

Bayreuth, 95447

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072

Jan Bentzen

affiliation not provided to SSRN

No Address Available

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