Pathways to Work for Low-Income Workers

Research Report

Pathways to Work for Low-Income Workers

The Effect of Work in the Temporary Help Industry

Abstract

This paper provides new evidence to inform the policy debate about the effect of a newly important industry -- the temporary help industry - on the labor market outcomes of low-income workers and those at risk of being on public assistance. We use several years of CPS data to document differences in characteristics and employment outcomes between temporary help workers and those in traditional work
arrangements. We then use a model-based approach, exploiting SIPP data and using propensity score matching techniques, to compare outcomes for low-income and at-risk workers in the temporary help industry both with those of similar workers in traditional employment and of nonworkers. The analysis shows that workers who are at risk of welfare recipiency are more than twice as likely to be in alternative work arrangements as other workers. An examination of outcomes one year later, including wages,
employment duration, and benefits, indicate that, not surprisingly, temporary workers had worse earnings and employment outcomes a year later than did similar individuals initially working in standard employment. Temporary workers fared substantially better one year later than did those who were initially not employed; temporary workers are nearly twice as likely to be working one year later. Although temporary workers do fare worse than those employed in traditional work, their outcomes one year later are much closer to those of standard workers than those of unemployed workers.

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