Do Changes in Regulation Affect Employment Duration in Temporary Help Agencies?

The employment duration of workers in temporary help agencies is seen as an important indicator of their job quality. Most of the countries that regulate temporary agency employment do so to ensure at least a minimal level of employment stability. Over the past three decades Germany has repeatedly liberalized the law on temporary agency employment. These successive reforms should have affected the employment duration in the temporary employment sector. Applying a mixed proportional hazard rate model to administrative data, the authors examine whether employment duration changed in response to these reforms. They find that successive extensions of the maximum assignment period significantly increased average employment duration, while "liberalizing" legislation, such as that allowing fixed-term contracts, tended to reduce it.