Incentives to Invest in the Human Capital of Temporary Agency Workers**

Zusammenfassung

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Growing diffusion of temporary agency work, in conjunction with the growing importance of human capital management, leads to the question who invests in the human capital of temporary agency workers. Therefore, we investigate the parties' incentives to invest and review the small number of existing empirical works. We show that there are incentives for all parties to invest even in general human capital, using the human capital theory and the concept of psychological contracts. Clients' incentives to invest crucially depend on their motives for using temporary agency work. Additionally, we analyze the evolving externalities of the investments and draw some conclusions concerning the implications for the further training of temporary agency workers.

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Auszug

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Incentives to Invest in the Human Capital of Temporary Agency Workers**

1. Introduction

"Firms are increasingly looking beyond 'standard employment relationships' for flexibility options" (Nienhüser/Matiaske 2006, 64). Temporary agency work being such an option represents a special kind of employment relation because the employee is connected with two firms. Temporary agency and client share an employer's rights and duties. Thus, temporary agency workers form part of an organization that is not their own (Garen 2006; Purcell/Purcell/Tailby 2004) and have no employment contract with the client firm that employs them. The industry of temporary agency work showed an increase of 14% in Germany last year (Gert2 2006, 1). Furthermore, temporary agency work has become a very important topic in the discourse on employment policies in Germany (for an overview, see Mitlacher 2006). This is primarily due to the fact that major changes in the German regulation of temporary agency work have taken place. The most important change concerns the introduction of equal pay and equal treatment principles. Despite the nondiscrimination principle, exceptions are statutory, such as the possibility that a collective labor agreement permits divergent regulations.

Simultaneously, 'human capital management' (Kessler/Lülfesmann 2006; Schol2/Stein/Bechtel 2004) is currently one of the most discussed topics in 'human resource management'. The existing literature, for example, investigates the connectedness between 'human capital,' training, and education (Booth/Brian 2005; Fabbris 2007; Garloff/Kuckulen2 2006), 'human capital' and earning inequality (Teulings 2005), and 'human capital' and innovation (Vinding 2006). Investments in human capital of labor are analy2ed as well, for example, investments in the human capital of trainees (Sadowski 1980; Sadowski 2002), employees (Casas-Arce 2004; Kessler/Lülfesmann 2006; Otte 2004), and self-employed (Kawaguchi 2001). In contrast to human capital management, little research exists on temporary agency work so far. The economic literature is focused on three main effects: first, whether and how temporary agency work can be a stepping-stone from unemployment to regular jobs (Addison/Surfield 2004; Amuedo-Dorantes/Malo/Munoz-Bullon 2005; Andersson/Wadensjö 2004; Gerfin/Lechner/Steiger 2005; Güell/Petrongolo 2005; Ichino/Mealli/Nannincini 2005; Ichino/Mealli/Nannicini 2006; Kvasnicka 2005; Zijl/Berg/Heyma 2004); second, whether new flexible staffing arrangements lead to a new labor market segmentation (Autor/Houseman 2005a; Autor/Houseman 2005b; Bentolila/Saint-Paul 1992; Doeringer/Piore 1971; Kalleberg 2003; Mitlacher 2005; Pfeifer 2005; Saint-Paul 199...

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