The Role of Temporary Help Agencies in Facilitating Temp-to-Perm Transitions

This paper evaluates the impact of agency work on temporary workers’ posterior likelihood of being hired on a permanent basis. We use administrative data on two groups of temporary workers for whom we have complete work histories since they are first observed in 1998 until the year 2004. One group consists of workers employed through a temporary help agency (THA) at some point during the seven year period under examination (treated group). The other group is composed of individuals employed as direct-hire temps at some point between 1998 and the year 2004, but never via a THA (control group). Using propensity score matching methods, we find that agency workers endure a lower likelihood of being hired on a permanent basis following their temporary assignment than their direct-hire counterparts.