The Growth of Temporary Services Work

Abstract

Temporary services employment grew rapidly over the past several decades and now accounts for a sizable fraction of aggregate employment. The authors use Current Population Survey data to examine the changing nature of temporary work and discuss explanations for its growth. Temps are no longer overwhelmingly female or limited to clerical occupations. They have less labor market security than permanent workers, being prone to more unemployment and more underemployment. Few, however, are in temp positions a year later and the majority transition to permanent employment. Temp wages are approximately 20 percent below permanent workers, but individual and job characteristics explain approximately two-thirds of the gap.

Do Temporary Help Jobs Improve Labor Market Outcomes for Low-Skilled Workers? Evidence from Random Assignments

“…In support of this hypothesis, Segal and Sullivan (1997) find that while mobility out of the temporary help sector is high, a disproportionate share of leavers enters unemployment or exits the labor force. If temporary help jobs exclusively substitute for spells of unemployment, these facts would be of little concern.…”

“…For comparison with prior fixed-effects estimates of the effect of temporary help jobs on the earnings of low-skilled workers (e.g., Segal andSullivan 1997, 1998;Ferber and Waldfogel 1998;Corcoran and Chen 2004), we also present in Table 7 a set of OLS (i.e., non-instrumental variables) models estimated both including and excluding fixed effects. Inclusion of individual fixed-effects in the OLS models reduces the estimated earnings and employment consequences 29 The estimates will identify a stable "intention to treat"relationship if treatment effects are homogenous or if random assignments uniformly raise or lower the probability that each participant obtains a given job placement (temporary help, directhire, non-employment).…”

Looking beyond the bridge: The effect of temporary agency employment on labor market outcomes

“…On the other hand, it can be argued that any human capital effects arising from temp work cannot be strong due to the primarily short-term, low-skilled nature of temp jobs, which are often below the worker"s qualifications (Segal & Sullivan 1997). These jobs may even be dead-ends since firms may not plan to fill these jobs permanently, thus limiting the temp worker"s regular employment prospects (Heinrich et al 2005).…”

Higher education in non‐standard wage contracts

“…Many studies concerned with the European labor market find evidence of this stepping-stone effect toward a permanent job (Segal and Sullivan 1997;Booth et al 2002;Zijl et al 2004). Recent studies on the Italian labor market also seem to confirm this hypothesis: Ichino et al(2005) show that temporary employment acts as a springboard to permanent jobs, and Gagliarducci (2005) finds that the likelihood of obtaining a permanent job increases with temporary contract duration, but decreases with the number of temporary contract experiences, particularly if interrupted by unemployment spells.…”