On the Wages of Temporary Help Service Workers in Germany

This paper produces …rst econometric estimates for Germany of the contemporanous wage gap associated with Temporary Help Service (THS) employment, as well as the long-term e¤ects of THS work on the future earnings of workers. Our estimates of the overall and group-speci…c wage gaps attached to THS work are large, albeit signi…cantly smaller than those cited in the existing descriptive literature. Moreover, we …nd no evidence for any discernable negative average long-term earnings e¤ects of THS work. If anything, THS work seems to have aided workers in putting to a halt declines in their relative earnings observable before joining the THS market. However, our results also show that average real male earnings in the THS industry have declined by about 9 % in the period 1975-1995. Largely unfettered by collective bargaining, downward real wage adjustment may well have been a driving factor behind the THS industry´s impressive employment growth over the last decades