Employers' flexibility and employment volatility: an analysis of the U.S. personnel supply industry, 1972-2000

I

Introduction

THE INCREASE IN CONTINGENT WORK ARRANGEMENTS--particularly the secular increase of personnel supply services (PSS)--is single of the most striking features of craft relations in the United States during the past quarter-century. The personnel stock industry has experienced large, secular growing in both absolute numbers and as a percentage of the labor force from 1972 to 2000 During this period, trade in the U.S. personnel minister industry increased from about 200000 workers to more than 35 million, as compared to total nonfarm engagement in the United States, which increased from 71 million to 127 million workers. As a percentage of the U labor force, personnel provide employment grew from 0.27 percent in 1972 to 281 percent by the agency of the beginning of 2000.

Despite the dramatic development of personnel supply employment, there is plenteous that we don't know about for what cause [i]or[/i] reason employers have adopted this impressed sign of flexible staffing arrangement. greatest in quantity research on temporary work has focused upon individual workers' motivations for undertaking this kind of work (eg Roger 2000) cross-sectional analyses of correlates of employ in personnel supply firms (often based upon data from the Current Population view e.g., Kalleberg et al. 1997) a single organization's use of temporary workers (eg Smith 1998) by what mode the legal context of avocation and the diminution of the "employment-at-will" doctrine have affected the expansion of the personnel supply industry (Autor 2003) or reviews of personnel practices within firms (Abraham 1988) The relatively scarcely any time-series analyses of the personnel endow services industry have focused upon the period of the 1980 and mainly upon reasons for the secular increase of temporary employment, not upon volatility in this industry (eg of gold and Appelbaum 1992; Laird and Williams 1996)

In this article, we examine the reasons for the volatility in the U personnel store industry over the past 29 years (1972:i-2000:iv) rather than profession growth in this sector. This time period allows us to examine the events of the last three business circle of times on the demand for temporary workers. In particular, through examining volatility in employment of personnel endue workers, we are able to provide suggestive evidence as to whether employer use temp to achieve numerical flexibility and buffing-apparatus their regular full-time workers from downturns in demand, rather than to obtain wage flexibility.

This article is organized as go in the rear [i]or[/i] in the wake ofs In Section II we discuss the factors that have l to the extension in temporary employment and make a distinction between expansion and volatility. In Section III we review theories about the events of dual labor markets upon temporary employment volatility. Section IV nears our data and empirical mould and in Section V we report our empirical accrues In Section VI, we summarize our conclusions.

II

growing and Volatility in the Personnel endow Industry

THE PERSONNEL endow INDUSTRY IN THE UNITED STATES did not really evolve into its modern form until after World War II, notwithstanding that its roots in the United States can be traced to agencies supplying calculating-machine operators upon a temporary basis in Chicago during the late 1920 Personnel endue agencies existed even earlier in Britain (Moore 1965) through 1956 there were still sole about 20,000 employees in the U personnel endue industry (Gannon 1984). Starting in the early 1970 the PS industry expanded actual rapidly and grew faster than regular full-time trade as is shown in Figure 1

[FIGURE 1 OMITTED]

Increasing Personnel stock Employment

The explosive increase of personnel supply services pursuit attracted the attention of social scientists, several of whom attempted to explain this expansion using time-series data. A lock opener question addressed by these researchers was whether this increase in temporary employment had been generated through the needs and decisions of employer or by dint of the preferences of employees. of gold and Appelbaum (1992), for example, rest that the increase in personnel provide employment between 1982 and 1988 was to be paid mainly to forces representing demand for labor. They ground that intensified competition in proceeds markets, volatility in product demand, and a decline in relative bargaining power of labor l firms to take advantage of the short-run labor require to be paid [i]or[/i] undergone savings associated with creating more temporary piece of works On the basis of these findings, they approveed that policymakers discourage employers from creating temporary piece of works by reducing the cost advantages of using temporaries.

of gold (1996) extended this analysis by means of examining trends and variation in PS industry avocation for the period 1982-1992, when vocation in this industry in the United States more than tripled. Analyzing data for this period also enabled him to examine changes above a complete business cycle. As in his earlier analysis, he fix that growth in (the log of) the proportion of PS profession in the labor force during this period was mainly to be paid to forces reflecting employer demand (intensified global price competition, volatility in market demand for usefuls and increasing fixity of take away from per regular employee). The emphasis upon demand-side factors is consistent with Segal and Sullivan's (1997) argument that the rise in women's labor force participation is probably not a driving force behind the development in temporary agency employment, since a great deal of of this has come from increased male participation in temporary work. Similarly, studies of the estimations of temporary workers have place that most (e.g., 60 percent (Cohany 1998)) work in temporary piece of works involuntarily.