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American Economic Journal: Applied Economics: Vol. 2 No. 3 (July 2010)

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Do Temporary-Help Jobs Improve Labor Market Outcomes for Low-Skilled Workers? Evidence from "Work First"

Article Citation

Autor, David H., and Susan N. Houseman. 2010. "Do Temporary-Help Jobs Improve Labor Market Outcomes for Low-Skilled Workers? Evidence from "Work First"." American Economic Journal: Applied Economics, 2(3): 96-128.

DOI: 10.1257/app.2.3.96

Abstract

Temporary-help jobs offer rapid entry into paid employment, but they are typically brief and it is unknown whether they foster longer term employment. We utilize the unique structure of Detroit's welfare-to- work program to identify the effect of temporary-help jobs on labor market advancement. Exploiting the rotational assignment of welfare clients to numerous nonprofit contractors with differing job placement rates, we find that temporary-help job placements do not improve and may diminish subsequent earnings and employment outcomes among participants. In contrast, job placements with direct-hire employers substantially raise earnings and employment over a seven quarter follow-up period. (JEL J22, J23, J24, J31, J68)

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Authors

Autor, David H. (MIT)
Houseman, Susan N. (Upjohn Institute for Employment Research, Kalamazoo, MI)

JEL Classifications

J22: Time Allocation and Labor Supply
J23: Labor Demand
J24: Human Capital; Skills; Occupational Choice; Labor Productivity
J31: Wage Level and Structure; Wage Differentials
J68: Mobility, Unemployment, and Vacancies: Public Policy

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