Impact Study of Temporary Health Service Employment on Later Earnings and Employment

The Role of Temporary Help Employment in Low-wage Worker Advancement
Heinrich, C. J., Mueser, P. R. & Troske, K. R.
Labor Market Intermediaries, edited by D. Autor.
Workforce Development
Heinrich, C. J., Mueser, P. R. & Troske, K. R. (2009). The Role of Temporary Help Employment in Low-Wage Worker Advancement. Studies of Labor Market Intermediation, Autor. Cambridge, Mass: National Bureau of Economic Research.

Low-skilled, less-educated, and minority workers are overrepresented in the workforce receiving temporary help service. There is debate among researchers and policymakers about whether providing employment through temporary help service firms provides a path to stable employment or reduces workers' access to better employment opportunities.

To examine how temporary work through the temporary help industry impacts workers in the long run, Peter Mueser co-authored a study which compared the experiences of these workers to those of workers without jobs or who took jobs in other industries. This study focused on individuals in Missouri seeking employment or cash assistance from Temporary Assistance for Needy Families (TANF), a job training program or intensive work search program, and employment exchange services. The researchers conducted analyses in the late 1990s, a time of strong economic growth, and again just after 2000, a time of stagnation.

The results of this study suggest that temporary help service firms enable individuals seeking employment assistance find jobs more quickly, and that these temporary means of employment offer substantial benefits for workers. These results are particularly evident in the experiences of workers who do not have alternative employment opportunities. However, workers who do not leave temporary help jobs experience poorer earnings prospects than their peers who move on. Transitioning to a job in another sector is key for workers using temporary help services firms, though participants benefit substantially from working with these firms if their alternative is no employment.

These results are important for policymakers considering the impact of temporary help services firms. While these firms are shown to help workers, policymakers must track how well these firms place workers into permanent jobs to get an accurate indication of the effectiveness of these firms' programs.