Low-Income and Low-Skilled Workers Involvement in Nonstandard Employment. Definitions

Our ability to determine alternative work arrangements in the SIPP is limited to identifying workers likely to be employed by temporary help agencies. The industry categorization of the two principal jobs, which is based on a 3-digit SIC code, can be used to learn whether the worker is employed in the temporary help services industry. We categorize a person as being employed in the temporary help services industry if he/she reports that either of the two reported jobs for a given wave is in SIC 736. SIC 736 includes those working for temporary help agencies and employment agencies. The four-digit category for temporary work (which includes some leasing companies) accounts for 89 percent of employment in SIC 736; the category for employment agencies accounts for the remaining 11 percent. Because individuals self-report the SIC code, we expect relatively few persons who work at companies managed by leasing companies will report in SIC 736; they would seem more likely to report the industry in which they work.

One question that arises when using SIC 736 to define temporary help workers is how well SIC 736 identifies agency temporary workers. We examine this using the February Contingent Workers Supplement to the CPS. Using CPS data for 1995 through 1999, we find that 57-70 percent of those in SIC 736 are classified as agency temporaries based on the supplement. In addition, roughly half of those who are identified as agency temporaries in the supplement reported SIC 736 as their industry. A large share of the latter mismatch appears to result from respondents reporting the industry of the place where the temporary agency assigned them to work rather than the industry of the temporary agency. Although these findings suggest caution in using the industry code to define temporary agency workers, we believe the share of agency workers within SIC 736 is high enough that strong differentials associated with agency work will be picked up by our analysis.

Similar to the CPS, in addition to examining temporary workers as a whole, we also use the SIPP to examine the subset of workers who may be at risk of welfare recipiency. We considered definitions of at risk of welfare receipt based on public assistance receipt as well as income relative to the federal poverty level.(64) In the end, we use a definition that balances the need to have enough cases for our analysis with a low enough income cutoff such that the sample members are at significant risk of welfare receipt.