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

Authors:
Publication Date:
Jul 2010
Project Programs:
Future of Work

Temporary-help jobs offer rapid entry into paid employment, but they are typically brief and it is unknown whether they foster longer term employment. The authors 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, the authors 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.

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