Employment protection and temporary work agencies Baumann, Florian; Mechtel, Mario; Stahler, Nikolai

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Baumann, Florian ; Mechtel, Mario ; Stahler, Nikolai
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Labour: Review of Labour Economics and Industrial Relations
Labor law -- Analysis; Labour law Analysis ; Labor force information
To authenticate to the full-text of this article, please visit this link: http://dx.doi.org/10.1111/j.1467-9914.2010.00493.x Byline: Florian Baumann (1), Mario Mechtel (1), Nikolai Stahler (1) Abstract: Abstract 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. Author Affiliation: (1)Eberhard Karls University, Department of Economics, Melanchthonstr. 30, 72074 Tubingen, Germany Article note: Florian Baumann (Eberhard Karls University) - Mario Mechtel (author for correspondence) - Nikolai Stahler (Deutsche Bundesbank), Eberhard Karls University, Department of Economics, Melanchthonstr. 30, 72074 Tubingen, Germany. Tel.: +49 7071 29 78182; Fax: +49 7071 29 5590; E-mail: mario.mechtel@uni-tuebingen.de.
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