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U.S. Department of Labor Futurework
  Trends and Challenges for Work in the 21st Century
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Flexible Staffing Arrangements

A Report on Temporary Help, On-Call, Direct-Hire Temporary, Leased, Contract Company, and Independent Contractor Employment in the United States

Susan N. Houseman
August 1999

6.3 Job Stability

It is generally presumed that workers in flexible staffing arrangements have less job security than those in regular full-time arrangements, but relatively little research has investigated this issue. Based on administrative data from the state of Washington, Segal and Sullivan (1997a) find that the average duration of temporary employment jobs is about two quarters and that three quarters of temporary employment jobs are accounted for by spells of four quarters or less. Not surprisingly, these figures are much lower than those for workers in other industries.

Anne Polivka and I matched individual records from the February 1995 CPS Supplement to records in March 1995 and February 1996 to examine labor market transitions of workers in a wide range of flexible staffing arrangements compared to those in regular arrangements (Houseman and Polivka 1999). We found that agency temporaries, on-call workers, direct-hire temporaries, contract company workers, and regular part-time workers exhibited significantly less job stability than regular full-time workers in the sense that they were more likely to be with a different employer, be unemployed, or be involuntarily out of the labor force one month and one year later. Interestingly, independent contractors did not experience less job stability than regular full-time workers. We also found that a substantial share of the modest decline in job stability over the last decade could be accounted for by the growth in temporary help agency employment.(16)

(16) Some research has also investigated the psychological impact of being in a flexible staffing arrangement. For references to this literature, see Beard and Edwards (1995).

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