The price of flexibility: what is temporary agency work entitled to cost?

Abstract

"Using the manufacturing industry as an example, we examine in this paper what role transactions costs, and especially employment protection costs, play in in-house decisions for or against temporary agency work. In order to identify the relevance of transaction costs, we elaborate first on the evidence of the in-house motivations for using temporary agency work. After this we discuss the approaches for measuring transaction costs. In order to estimate which extra costs are justified through the transaction cost advantages of temporary agency work, we concentrate on the costs of employment protection as a clearly delimitable, distinguishing characteristic between labour involved in temporary agency work and the core workforce. We estimate these costs using data from the Federal Statistical Office and the IAB Establishment Panel Study and show, by way of an exemplary calculation, how taking transaction costs into account has an impact on the decision for or against temporary agency work." (Text excerpt, IAB-Doku) ((en))

Cite article

Crimmann, A. & Lehmann, C. (2012): Der Preis der Flexibilität: Was darf Zeitarbeit kosten? In: R. B. Bouncken, M. Bornewasser & L. Bellmann (Hrsg.) (2012): Die neue Rolle der Zeitarbeit in Deutschland (Beiträge zur Flexibilisierung, 03), p. 103-136.