Employment protection and temporary work agencies

Research output: Journal contributionsJournal articlesResearchpeer-review


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.

Original languageEnglish
JournalLabour - Review of labour economics and industrial relations
Issue number3
Pages (from-to)308-329
Number of pages22
Publication statusPublished - 09.2011
Externally publishedYes