Temporary Agency Work and Firm Competitiveness: Evidence from German Manufacturing Firms

25 Pages Posted: 30 Jul 2011

See all articles by Sebastian Nielen

Sebastian Nielen

German Institute for Economic Research (DIW Berlin)

Alexander Schiersch

German Institute for Economic Research (DIW Berlin)

Date Written: June 2011

Abstract

This paper addresses the relationship between the utilization of temporary agency workers by firms and their competitiveness measured by unit labor costs, using a rich, newly built, data set of German manufacturing enterprises. The analysis is conducted by applying different panel data models while taking the inherent selection problem into account. Making use of dynamic panel data models allows us to control for firm specific fixed effects as well as for potential endogeneity of explanatory variables. The results indicate a U-shaped relationship between the extent that temporary agency workers are used and the competitiveness of firms.

Keywords: temporary agency work, competitiveness, firm performance, manufacturing

JEL Classification: D24, L23, L60

Suggested Citation

Nielen, Sebastian and Schiersch, Alexander, Temporary Agency Work and Firm Competitiveness: Evidence from German Manufacturing Firms (June 2011). DIW Berlin Discussion Paper No. 1135, Available at SSRN: https://ssrn.com/abstract=1898546 or http://dx.doi.org/10.2139/ssrn.1898546

Sebastian Nielen

German Institute for Economic Research (DIW Berlin) ( email )

Mohrenstraße 58
Berlin, 10117
Germany

Alexander Schiersch (Contact Author)

German Institute for Economic Research (DIW Berlin) ( email )

Mohrenstraße 58
Berlin, 10117
Germany

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