Identifying the Substitution Effect of Temporary Agency Employment

10 Pages Posted: 14 Apr 2012

See all articles by Elke J. Jahn

Elke J. Jahn

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

Enzo Weber

University of Regensburg; Government of the Federal Republic of Germany - Institute for Employment Research (IAB); Osteuropa-Institut (OEI)

Abstract

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.

Keywords: temporary agency employment, substitution effect, Germany

JEL Classification: C32, J21, J41

Suggested Citation

Jahn, Elke J. and Weber, Enzo, Identifying the Substitution Effect of Temporary Agency Employment. IZA Discussion Paper No. 6471, Available at SSRN: https://ssrn.com/abstract=2039657

Elke J. Jahn (Contact Author)

Institute for Employment Research (IAB) ( email )

Regensburger Str. 104
Nuremberg, 90478
Germany

University of Bayreuth ( email )

Bayreuth, 95447
Germany

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Enzo Weber

University of Regensburg ( email )

93040 Regensburg
D-93040 Regensburg, 93053
Germany

Government of the Federal Republic of Germany - Institute for Employment Research (IAB) ( email )

Regensburger Str. 104
Nuremberg, 90478
Germany

Osteuropa-Institut (OEI) ( email )

Landshuter Str. 4
Regensburg, 93047
Germany

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