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Employment Protection and Temporary Work Agencies
Author(s) -
Baumann Florian,
Mechtel Mario,
Stähler Nikolai
Publication year - 2011
Publication title -
labour
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.403
H-Index - 34
eISSN - 1467-9914
pISSN - 1121-7081
DOI - 10.1111/j.1467-9914.2010.00493.x
Subject(s) - agency (philosophy) , work (physics) , temporary work , unemployment , labour economics , business , job loss , economics , economic growth , sociology , engineering , mechanical engineering , social science
Employers who use temporary agency staff in contrast to regular staff are not affected by employment protection regulations when terminating a job. Therefore, services provided by temporary work agencies may be seen as a substitute for regular employment. In this paper, we analyse the effects of employment protection on the size of the temporary work agency sector in a model of equilibrium unemployment. We find that higher firing costs may even reduce temporary work agency employment if agencies themselves are subject to employment protection, a consideration that distinguishes our results from those for fixed‐term employment arrangements.