Low-Income and Low-Skilled Workers Involvement in Nonstandard Employment. Key Results


The analysis of the CPS data uncovered a series of useful preliminary facts about at-risk temporary help workers. In particular, we found some evidence that workers at risk of public assistance receipt fare worse in alternative work arrangements than do other workers in such arrangements. This held true across a variety of dimensions: wages, incidence of part-time work, job duration and employer-provided benefits. The CPS analysis also demonstrated that at-risk workers are also less happy with their work, and more likely to be in the job for reasons of necessity than are other temporary help workers.

The CPS analysis also verified the result that has often been cited in the literature--that businesses use temporary work as a response to short-term demand fluctuations, rather than as a long-term production decision. This has clear implications for the sector when the macro economy experiences a downturn.

In addition, the CPS analysis found that at-risk temporary help workers, by and large, had much lower levels of education than did other workers--suggesting that the alternative to temporary help employment for this group might well be nonemployment rather than employment. (60) This finding led us to use the SIPP data to make comparisons between individuals who were in temporary work and those who were not employed as well as between individuals who were in temporary work and regular employment.

The results of the SIPP analysis were quite striking. As expected, we found that work histories were an important contributor to whether or not individuals were employed by temporary agencies. Although we were unable to fully control for work histories, it is likely that our efforts improved the match by much more than would be possible using cross-sectional data--suggesting that simple tabulations of outcomes for different groups of workers are likely to be misleading. In addition, we found that while individuals who had a spell in temporary work definitely had worse earnings and employment outcomes than did those who worked in the "nontemporary" sector, they did much better than similar individuals who had a spell in nonemployment. The incidence of welfare receipt and income below twice the poverty line was also reduced as compared with individuals.

These results raise important questions about the appropriate counterfactual to use in making comparisons. In other words, the answer to the research question "Does temporary help employment improve outcomes for at-risk workers?" depends critically on whether the comparison group is those who were not employed during the initial observation period, or those who were in regular employment.