BLS WORKING PAPERS

U.S. DEPARTMENT OF LABOR

Bureau of Labor Statistics

 

OFFICE OF EMPLOYMENT RESEARCH

AND PROGRAM DEVELOPMENT

The Implications of Flexible Staffing Arrangements for Job Security

Susan N. Houseman and Anne E. Polivka

Working Paper 317

June 1998

 

This paper was prepared for the conference on "Changes in Job Security" sponsored by the Russel Sage Foundation,

February 27-28, 1998 New York. We thank Alec Levenson, David Neumark, and other conference participants for helpful

suggestions. We are grateful to Lillian VesicPetrovic for outstanding research assistance and to Claire Black and Babette

Schmitt for assistance in preparing the document. The views expressed in this paper are those of the authors and do not necessarily reflect the policies of the Bureau of Labor Statistics or the views of other BLS staff members.
 

The Implications of Flexible Staffing Arrangements for Job Security

Susan N. Houseman

W.E. Upjohn Institute for Employment Research

e-mail: houseman@we.upjohninst.org

Anne E. Polivka

Bureau of Labor Statistics

e-mail: polivka_a@bls.gov

February 1998

revised April 1998

This paper was prepared for the conference on “Changes in Job Stability and Job Security” sponsored by

the Russell Sage Foundation, February 27-28, 1998 New York. We thank Alec Levenson, David

Neumark, and other conference participants for helpful suggestions. We are grateful to Lillian VesicPetrovic for outstanding research assistance and to Claire Black and Babette Schmitt for assistance in

preparing the document. The views expressed in this paper are those of the authors and do not necessarily

reflect the policies of the Bureau of Labor Statistics or the views of other BLS staff members.
1

There is a widespread perception that the nature of the employment relationship in the United

States is fundamentally changing, resulting in less attachment between workers and firms and a decline in

job security. For many, flexible staffing arrangements--including temporary, contract, and part-time

work—epitomize unstable jobs and recent growth in some of these arrangements is viewed as evidence of a

broader decline in job security.

If flexible staffing arrangements are a source of significant decline in job security in the United

States, then it must be the case that 1) the share of employment in these arrangements has increased

substantially in recent years, and 2) these jobs are indeed less stable. In fact, there is little evidence on

either matter. Until recently, statistics providing a comprehensive picture of workers in flexible

arrangements were not collected and thus data on trends in these types of employment are spotty. 

Similarly, although some studies have examined the labor market dynamics of female part-time workers

(Blank 1994) and workers in the temporary help industry (Segal and Sullivan 1997a, 1997b), lack of data

has hampered the examination of such issues in other, quantitatively important arrangements. The primary

purpose of this paper is to shed new light on the job and employment stability of workers in a wide range of

flexible staffing arrangements using two new sources of data. 

Although it is generally presumed that flexible work arrangements reduce job security, such

arrangements may serve as a vehicle for obtaining a more permanent, regular position, for those desiring

such a job. Companies may use flexible staffing arrangements, in part, to screen workers for regular

positions. Under this scenario, the use of such arrangements may actually result in better job matches and

longer job tenure. Even if companies do not generally promote workers in flexible staffing arrangements

into regular positions, workers may gain valuable job experience by holding such positions and

consequently be better able to find more permanent, regular positions. In this case, the use of flexible work

arrangements may help to reduce unemployment among certain groups of workers. If, however, companies

primarily are substituting flexible arrangements for regular positions and are rarely using them as a
2

screening device, the growth in such arrangements may result in lower job tenure, more frequent job

changes, and higher levels of unemployment in the aggregate.

We draw on a nationwide employer survey on flexible staffing arrangements conducted by the

Upjohn Institute for Employment Research and on the February 1995 Supplement to the Current

Population Survey (CPS) on Contingent and Alternative Work Arrangements to provide insights into the

relative importance of each scenario. The Upjohn Institute employer survey provides evidence on the

magnitude of employers’ use of various flexible staffing arrangements, why employers use these staffing

arrangements, and the extent to which employers move workers in these positions into regular jobs within

their organization. 

The February 1995 supplement to the CPS represented the first attempt in government statistics to

provide a comprehensive count of workers in a wide variety of employment arrangements. Exploiting the

longitudinal component of the CPS, we match workers in February 1995 to their records in March 1995

and February 1996. With these matched records, we are able to follow individuals holding flexible work

arrangements in February 1995 and compare their subsequent labor force status with those holding regular,

full-time positions in February 1995. 

Flexible Work Arrangements: Definitions and Prevalence

Using the February 1995 CPS data, we classify workers into eight mutually exclusive categories:

agency temporaries, on-call workers, direct-hire temporary workers, contract company workers,

independent contractors, regular self-employed (who are not independent contractors), regular part-time

workers, and regular full-time workers. We do not distinguish between those who work part-time and fulltime hours in the first six categories of employment. Regular part-time and regular full-time workers

comprise those who are not classified in one of the other arrangements. Our temporary help agency

category includes all of those who state they are paid by a temporary help agency. Thus, it includes the

permanent staff of these agencies, though they are expected to represent a relatively small percentage of
3

this category. In the February 1995 CPS, a small number of individuals was classified as both on-call and

contract company workers. We classified these individuals as on-call workers in our data set.

The category direct-hire temporaries comprises temporaries hired directly by the company, rather

than through a staffing agency. The CPS does not include a specific question classifying individuals as

direct-hire temporaries. We constructed this category based on a series of questions in the February

Supplement. Our “broad” definition of direct-hire temporaries includes those who indicated that their job is

temporary or that they can not stay in their job as long as they wish for any of the following reasons: they

are working only until a specific project is completed, they are temporarily replacing another worker, they

were hired for a fixed period of time, their job is seasonal, or they expect to work for less than a year

because their job is temporary. Our “narrow” definition of direct-hire temporary is the same as our broad

definition except we require individuals to explicitly state that their job is temporary. Our category of

direct-hire temporaries excludes those already classified in another flexible work arrangement. 

We also use broad and narrow definitions of contract company workers. In the broad definition,

we classify individuals as contract company workers if they indicated that they work for a company that

contracts out their services and that they generally work at the customer’s worksite. In the narrow

definition, we also require that the individual usually be assigned to just one customer. 

The category independent contractor includes those who indicated that they work as an independent

contractor, an independent consultant, or a free-lance worker. Thus, the category independent contractor is

a large, and no doubt diverse, group of workers. The vast majority of independent contractors (85 percent )

report being self-employed.1

Table 1 reports the distribution of employment by employment arrangement according to data from

the February 1995 CPS. It is interesting to note that agency temporaries account for only about one

 1

A further explanation of the variables in the Contingent and Alternative Work Arrangement Supplement

may be found in a data appendix available from the authors and in Polivka (1996).
4

percent of total employment in these data. In the Current Employment Survey (CES), the Bureau of Labor

Statistics’ establishment survey, the percentage of employment accounted for by agency temporaries is

about double that number. Part of the difference may be explained by differences in the data collected in

the two surveys. Specifically, the CES counts jobs in the temporary help services industry, while the CPS

counts workers whose main jobs are in this industry. Consequently, individuals registered with more than

one temporary agency would show up once in the CPS, but could appear two or more times in the CES. 

Also multiple job holders with secondary jobs in the temporary help industry would not be counted in the

CPS as agency temporaries, whereas those workers’ secondary jobs would be counted in the CES. Another

possible explanation is that, in spite of questions in the CPS designed to avoid this problem, some

respondents may still view the client to whom they are assigned as their employer and thus fail to report

that they are paid by a temporary help service. Finally, many companies classified as temporary help

agencies in the CES may also be structured to provide both agency temporaries and contract company

workers or leased employees (Polivka 1996). Using estimates from a recent BLS study, it can be shown

that about 32 percent of the difference between the CPS and CES estimates are accounted for by the

inclusion of leased employees as agency temporaries in the CES.2

Given the caveat that the CPS may understate employment in temporary help agencies, it is still

interesting to note that on-call, direct-hire temporary, contract company, and independent contractor are all

quantitatively as important or more important than temporary help agency employment. Together, agency

temporary, on-call, direct-hire temporary, contract company, independent contract, and regular part-time

workers account for 26.6 percent of total employment.

Workers in flexible arrangements, except those working as contract company workers, were asked

 2

This figure comes from the authors’ calculations from an unpublished internal BLS work table on the

prevalence of employee leasing in BLS’s establishment estimates of the Help Supply Industry.
5

if they preferred a regular wage and salary or full-time arrangement. If workers in these arrangements

responded affirmatively, we classified them as dissatisfied with their current arrangement. We classified

contract company workers as dissatisfied with their arrangement if they reported that they had been

searching for another primary job as something other than a contract worker. The percent in each flexible

arrangement dissatisfied with their work arrangement is reported in Table 1, column 2. Apart from

independent contractors and regular, self-employed, the level of dissatisfaction is quite high. Among agency

temporaries, on-call workers, and direct-hire temporaries, at least half report being unhappy with their

work arrangement. 

Workers in flexible arrangements also generally have much shorter job tenure. As shown in Table

1, the percent of workers with job tenure of one year or less is much higher for workers in flexible

arrangements than for regular, full-time workers, with the exception of independent contractors who, like

the regular, self-employed, have a much lower percentage with very short tenure. Although workers in

flexible arrangements (including regular part-time workers but excluding regular self-employed) comprise

26.6 percent of the workforce, they account for 41.2 percent of those with job tenures of a year or less. 

This fact is at least consistent with the hypothesis that any shift in employment toward flexible staffing

arrangements will result in lower job tenure in the aggregate.

Information on the number of workers in flexible staffing arrangements was also collected in the

1996 Upjohn Institute employer survey. In that survey, employers from a stratified random sample of 550

private sector establishments with 5 or more employees in the continental United States were interviewed

by telephone on their use of five types of flexible work arrangements: temporary help agency, direct-hire

temporary , part-time, on-call, and contract workers. The implied magnitude of the use of flexible staffing

arrangements in the Upjohn survey is very similar to figures in the February 1995 CPS Supplement, where
6

comparisons are possible.3

 The Upjohn Institute employer survey also provides information on how

employment of workers in flexible arrangements is distributed across businesses. Interestingly, use of all

types of flexible arrangements is widespread: 46 percent of the establishments in the survey used agency

temporaries, 38 percent used direct-hire temporaries, 72 percent used regular part-time workers, 27 percent

used on-call workers, and 44 percent used contract workers. Seventy-eight percent of the establishments in

the sample used at least one type of flexible staffing arrangement besides regular, part-time workers. 

Trends in the Use of Flexible Staffing Arrangements

As noted above, the Supplement to the February 1995 CPS represented the first attempt in

government statistics to take a comprehensive count of workers in a wide variety of work arrangements. 

The supplement was repeated in February 1997. Between these two points in time, while the number of

workers in these arrangements grew, they remained roughly the same as a percentage of total employment

(U.S. Department of Labor, 1997). This two-year time period, during which the economy was in rapid

expansion, is too short to detect any real trends in these employment arrangements for the 1990s, however.

Longer time series on employment in flexible work arrangements are limited to part-time workers

and agency temporaries. Government statistics on part-time employment come from the CPS. The fraction

of workers usually working fewer than 35 hours per week rose substantially during the 1970s, but only

modestly in the 1980s. Part-time employment grew from 14.5 percent of total employment in 1969 to 16.4

percent in 1979 to 17.0 percent in 1989; all of these years represented peaks in the business cycle. 

Changes to the CPS in 1994 increased the number classified as part-time. However, when adjustment

factors designed to account for the effect of the redesign are used, part-time employment actually declined

 3

A more detailed discussion of the survey instrument and comparisons between figures in the Upjohn

Institute employer survey and the February 1995 CPS are found in Houseman (1997a, 1997b).
7

from 17.0 percent of total employment in 1989 to 16.2 percent in 1997 (Polivka and Miller, 1995). The

CES provides information on employment in the help supply services industry, SIC 7363, which is

comprised primarily of temporary help agencies. From 1982 to 1996 the share of non-farm payroll

employment in help supply services rose rapidly from 0.5 percent to 2.0 percent. 

Some information is available on employment trends in other types of flexible work arrangements,

such as on-call, direct-hire temporary, contract company, and independent contractor work from various

employer surveys. Although none of these surveys provides time series data on employment in other

arrangements for a nationally representative sample of employers, collectively, the evidence from the

surveys suggests growth at least in some flexible arrangements during the 1980s and 1990s. Evidence

from government statistics and privately-conducted employer surveys on growth in various flexible work

arrangements is summarized in Table 2.

Why Employers Use Flexible Staffing Arrangements

It is generally presumed that workers in most flexible arrangements enjoy little job security

compared with those in regular positions and thus that any growth in the proportion of workers in flexible

arrangements will reduce job stability, as evidenced by lower job tenure, and employment stability, as

evidenced by higher unemployment. However, if firms are primarily using these arrangements as a way to

screen workers for regular jobs, their growth may actually increase job stability by facilitating better

matches between workers and firms. Given the large number of lawsuits brought by dismissed employees,

employers may wish to screen workers through temporary help and other staffing agencies, which are the

official employer during the probationary period. Staffing agencies may also develop a comparative

advantage in recruiting and screening workers for certain types of jobs. In addition, because workers in

flexible arrangements usually receive fewer benefits than full-time workers, a company may wish to try out

a worker in a flexible staffing arrangement before incurring expensive benefits costs. Even if firms do not

generally extend offers of regular employment to workers in these arrangements, such jobs may provide
8

valuable work experience and help workers find regular positions. Thus, even if work in these

arrangements lowers a worker’s expected job tenure, it may result in little increase in the probability of

becoming unemployed. 

The Upjohn Institute employer survey on flexible staffing arrangements provides some evidence on

the first issue: the extent to which firms use flexible arrangements as a screening device and move workers

in these arrangements into regular positions. If a company used agency temporaries, direct-hire

temporaries, on-call workers, or regular part-time workers, they were asked a detailed set of questions on

why they used the particular arrangement. Although screening candidates for regular jobs was cited as

important by many employers, particularly those using agency temporaries (21 percent) and part-time

workers (15 percent), the reasons most commonly cited by employers for using various types of staffing

arrangements concern the need to accommodate fluctuations in their workload or in their regular staff. For

example, about half of the employers using agency temporaries cited filling a vacancy until a regular

employee is hired, filling in for an absent regular employee, and providing assistance at times of unexpected

increases in business as important; 55 percent of employers using direct-hire temporaries cited seasonal

needs; 62 percent of employers using regular part-time workers cited the need for assistance during peak

time hours of the day or week; and 69 percent of employers using on-call workers cited the need to fill in

for absent employees. 

The relative importance of why employers, on average, use flexible staffing arrangements may

differ from why, on the margin, employers are increasing their use of these arrangements. The answer to

the latter question is particularly relevant for assessing the likely effects of any increase in the use of

flexible staffing arrangements on job security. In the Upjohn Institute survey, employers who stated they

had increased their employment in a particular flexible staffing arrangement relative to regular employment

since 1990 were asked why. Table 3 summarizes the responses to this question. The reasons cited for

increasing the use of agency temporaries are quite mixed. On the one hand, 24 percent cited greater use of
9

agency temporaries to screen workers for regular positions and 37 percent cited difficulty finding qualified

workers on their own. These responses suggest that many companies are looking ultimately to hire

temporary workers into permanent positions. On the other hand, 37 percent of employers cited a need to

increase workforce flexibility to better accommodate fluctuations in workload, suggesting a shift in their

employment mix toward temporary positions. 

For the other types of flexible staffing arrangements, there is no indication that an important reason

companies are increasing their use relative to regular workers is to screen workers and move them into

regular positions.4

 The need to increase workforce flexibility to better accommodate fluctuations in

workload was cited by a large percentage of employers increasing their relative use of short-term hires,

part-time workers, and on-call workers. Competitive pressures to reduce costs and inability to compete

with contractors on price, quality, and market position are particularly important factors in employers’

decisions to contract out work. For all types of flexible staffing arrangements, business expansion was

cited by many as an important reason for increasing their relative use. If management increases the use of

these arrangements when employment is stagnant or falling, it will have to cut the number of regular

positions, potentially harming workplace morale. It can increase the proportion of its workforce in flexible

staffing arrangements without reducing the number of regular workers during an expansion. Additionally,

management may choose to increase the relative use of workers in flexible arrangements during an

expansion if it is concerned that the increase is temporary. 

 4

Employers were asked to state which reasons from a preset list were important for the increase in their

use of a particular staffing arrangement. This list varied by type of arrangement. Employers increasing their use

of part-time workers, on-call workers, and contractors were not specifically asked whether the increase was to

screen workers for regular positions. However, employers were asked whether there were any other important

reasons for increasing their use of a particular staffing arrangement. No employer mentioned screening in

response to this question.
10

Employers participating in the survey also were asked to evaluate the extent to which they move

workers in flexible arrangements into regular positions. Specifically, employers using agency temporaries,

direct-hire temporaries, regular part-time workers, or on-call workers were asked if their organization

moved each type of worker into regular positions often, occasionally or sometimes, seldom, or never. 

Table 4 reports the responses to this set of questions. Although for each type of arrangement only a small

minority of employers stated that they often move flexible workers into regular positions, between 36 and

54 percent reported often, occasionally or sometimes moving workers in flexible arrangements into regular

positions. 

To get a better sense of the quantitative importance of mobility into regular positions, we ran

simple correlations between whether or not an employer often moves agency temporaries, direct-hire

temporaries or part-time workers into regular positions and the intensity of the employer’s use of each type

of worker, as measured by the ratio of workers in the flexible arrangement divided by regular workers.5

We also ran the simple correlation between a combined category of whether the employer often,

occasionally or sometimes moves each of these types of workers and the intensity of their use. These

correlations are positive (.16 and .14) and significantly different from zero in the case of agency

temporaries but are insignificant for direct-hire temporaries and part-time workers. This finding is

consistent with that of a survey of agency temporaries by the National Association of Temporary Services

(1994) in which more than one-third of respondents reported being offered a job by the organization to

which they had been on assignment.

Although certainly employers do move workers in flexible arrangements into regular positions,

 5

For agency and direct-hire temporaries, data on the number working at the establishment over the course

of the year and the average duration of assignment were collected. This allowed us to construct the average

number of agency or direct-hire temporaries at any point in time. Employers reported the number of regular parttime workers at the end of 1995.
11

there also is concern that companies do just the opposite: move workers from regular positions into flexible

arrangements. Questions in the February Supplements to the CPS shed some light on the prevalence of this

phenomenon. Specifically, individuals who were identified in the February 1997 CPS as agency

temporaries, on-call workers, contract company workers (under our narrow definition), and independent

contractors were asked whether they had always been in their present arrangement at the place they were

currently working: 9.0 percent of all agency temporaries, 11.5 percent of contract company workers, 15.9

percent of on-call workers, and 8.5 percent of independent contractors reported working at the same place

in another type of work arrangement. These workers were not directly asked the type of arrangement in

which they were previously working, but they were asked how long they had worked there prior to being

switched. Among agency temporaries, 39.5 percent had worked a year or more and 22.5 percent had

worked three or more years prior to being switched; among on-call workers, 76.8 percent had worked a

year or more and 51.2 percent had worked three or more years prior to being switched. Among

independent contractors about 84.2 percent had worked three or more years prior to being switched. These

tenure distributions imply that, with the possible exception of agency temporaries, the majority of workers

who were switched were not in a short-term flexible arrangement and most of them probably were in

“regular permanent” positions.

In sum, evidence from the Upjohn Institute survey provides some support for the hypothesis that

the increase in agency temporary employment may be partly attributable to companies’ use of this

arrangement to screen workers for permanent positions, although traditional reasons concerning the

accommodation of fluctuations in workload or staff also appear important. The Upjohn Institute survey

suggests that screening workers for permanent positions is not a particularly important reason companies

use or are increasing their use of other flexible staffing arrangements. Moreover, data from the February

1997 CPS Supplement suggests many employers are switching workers from regular positions into flexible

arrangements. 
12

Job and Employment Stability: Evidence from the CPS

In this section we exploit the longitudinal component of the CPS to track workers who were in

flexible arrangements in February 1995 and compare their labor market status over time with those who

were in regular, full-time jobs in February 1995. Blank (1994) uses PSID data to study the transitions of

women in part-time jobs into full-time work or out of the labor force and Segal and Sullivan (1997(a),

1997(b)) use data from the main CPS questionnaire and administrative records data from the state of

Washington to examine labor market outcomes of workers in the temporary help industry. However, the

February 1995 CPS affords the first opportunity in a large data set to examine labor market outcomes of

those in a much broader set of flexible arrangements. 

Households in the CPS are in the sample for four months, out of the sample for eight months, and

back in the sample for four months. From one month to the next a maximum of three-fourths of the sample

can be matched; in months exactly a year apart a maximum of one-half of the sample can be matched. In

practice, given that the CPS sample is based on addresses, the proportion of individuals who are the same

across months is lower because some individuals and households move each month and some respondents

refuse to continue cooperating. We matched individuals from the February 1995 CPS with those from the

March 1995 CPS and February 1996 CPS. 

In our data, a slightly lower proportion of workers in flexible arrangements in February 1995 were

matched in subsequent months compared with workers in regular, full-time positions, suggesting that

workers in flexible arrangements are somewhat more inclined to move. Assuming that workers who move

are also more likely to change jobs, our analysis may understate the extent to which workers in flexible

arrangements change jobs relative to regular, full-time workers. Any bias in our analysis on the propensity

of workers in flexible arrangements to become unemployed compared to regular workers is unclear. On the

one hand, those who are relocating may be more likely to have obtained other employment, so those who do

not move may be more likely to become unemployed. On the other hand, those who become unemployed
13

may be more likely to relocate to look for work or to stay with friends or family in order to save money. To

help account for differences in attrition from our sample, we weighted the tabulations presented in the

tables below using specially constructed weights.6

Our matched data allow us to follow the labor market status of workers in flexible arrangements

one month and one year later and compare their outcomes with those who began in regular, full-time jobs. 

Specifically, from the March 1995 and February 1996 data, we can determine whether the individual is

employed, unemployed, or not in the labor force. A question on the basic March 1995 survey also

explicitly asks individuals who are employed if their employer is the same as in the previous month. Using

data on job tenure from the February 1996 Supplement to the CPS, we can also determine if individuals

hold the same job in February 1996 as they did one year earlier. A major drawback of the CPS data is that

we only know the individual's type of work arrangement in February 1995. Thus, for example, we do not

know if a direct-hire temporary worker who changed employers between February 1995 and March 1995

holds another temporary position or is in a regular, permanent job. 

Determining whether agency temporary and contract company workers have changed employers

between periods is complicated by the fact that many misreport their employer as the client firm. In the

basic CPS each month, the respondents are asked to give or verify the name of their employers. In the

February 1995 Supplement, individuals identified as working for a temporary help agency or for a

company that contracts out their services were then asked if the employer listed for them in the basic CPS

was the temporary help agency/contract company or the business for whom they were doing the work. In

February 1995, 57 percent of agency temporaries and 17 percent of contract company workers under our

narrow definition had incorrectly given the client firm as their employer. When we distinguish between

 6

Details on the construction of these weights along with other variables are provided in the data appendix.

the authors.
14

employed with the same employer and employed with a different employer in the analysis below, we

exclude those individuals misreporting their employer as the client firm in the February 1995 data. 

Although these exclusions likely increase the accuracy of our classification as to whether the individual has

the same or different employer, they substantially reduce the sample sizes in the two categories. Moreover,

the distribution of subsequent labor force outcomes of agency temporaries who accurately report their

employer as the temporary help agency is quite different from that of those who report the client as their

employer. In particular, the latter are much more likely to drop out of the labor force and much less likely

to become unemployed than the former. We have no explanation for these differences, but the fact that we

use a restricted sample of agency temporaries in the results reported below should be borne in mind.

Simple descriptive statistics on the labor market transitions of workers by their employment

arrangement in February 1995 are shown in Tables 5 and 6. Subsequently, we also present results of

multivariate analyses which test for differences in labor force transitions by initial employment

arrangement. Controlling for individual and job characteristics generally do not alter the picture portrayed

in the descriptive statistics, however. Table 5 shows the labor force status in March 1995 of workers by

their employment arrangement in February. Chi-square tests show that the distribution of labor force

status for all types of flexible arrangements is significantly different than that of regular full-time workers. 

Workers in all flexible arrangements are less likely to be employed one month later compared to regular

full-time workers. The differences in employment rates are particularly dramatic for agency temporaries,

on-call workers, and direct-hire temporaries. The employment rate for contract company workers is closest

to that of regular, full-time workers.

Except for the self-employed, who are much more likely than regular, full-time workers to drop out

of the labor force, the incidence of unemployment one month later is higher for all workers in flexible

arrangements than for regular, full-time workers. Agency temporaries are almost nine times more likely to

become unemployed within a month than are regular, full-time workers. Even regular part-time workers
15

are more than twice as likely to be unemployed a month later than are regular, full-time workers. 

One might suspect that workers in flexible arrangements have a higher incidence of unemployment

because they are more inclined to quit their jobs voluntarily. Questions on the March 1995 CPS

specifically ask the unemployed whether they held a job prior to becoming unemployed and, if so, whether

they lost or left that job. About 80 percent of those who were regular, full-time workers in February 1995

and who were unemployed the following month reported losing their job. Although the sample sizes are

small for some cases, this figure is the same or higher for all categories of flexible arrangements. Thus, it

appears that the higher incidence of unemployment among workers in flexible arrangements cannot simply

be ascribed to a higher propensity to quit their job. 

Apart from contract company workers, those in flexible arrangements also are more likely to drop

out of the labor force within a month than are regular, full-time workers. Moreover, workers in flexible

arrangements are more likely to be out of the labor force, but express a desire to be in the labor force. 

Below, we use the term involuntarily out of the labor force to denote this status.7

 The probability of

becoming unemployed or involuntarily out of the labor force is particularly high among agency

temporaries, on-call workers, and direct-hire temporaries. Among those who remain employed, workers in

flexible arrangements are more likely to have changed employers; changing employers is particularly

common among agency temporaries, on-call workers, direct-hire temporaries, and contract company

workers.

Table 6 shows the labor market outcomes of workers in February 1996 by type of employment

arrangement one year earlier. Again, chi-square tests show that the distribution of labor market outcomes

is significantly different between regular, full-time workers and those in other arrangements. However, the

 7

Workers who in our terminology are involuntarily out of the labor force differ from the BLS definition of

discouraged workers, who must say that they currently want a job, must be available to work, must have looked for

work in the last year, and must indicate they believe no work is available for them.
16

patterns differ by type of arrangement. Agency temporaries, on-call workers, direct-hire temporaries,

contract workers, and regular part-time workers are much less likely to be employed one year later in part

because they experience much higher levels of unemployment and in part because they are more likely to

drop out of the labor force both voluntarily and involuntarily. One year later, agency temporaries, on-call

workers, direct-hire temporaries, contract workers, and regular part-time workers are also much more

likely than regular full-time workers to have changed employers. The pattern for independent contractors

and other self-employed is quite different. Although workers in these groups had somewhat lower

employment rates than regular full-time workers one year later, the lower employment rates may be

ascribed entirely to the fact that a much higher proportion voluntarily drop out of the labor force. They are

less likely than regular full-time workers to change employers and to become unemployed.8

Many in flexible arrangements prefer the schedules or flexibility of temporary, part-time, and

contract work. Arguably, then, of greatest interest is the labor market outcomes of those who are in

flexible arrangements but who prefer a regular position. Tables 5 and 6 also display the labor market

outcomes of those in flexible arrangements in February 1995 one month and one year later, respectively, by

whether or not they were satisfied with their arrangement. In general, those expressing dissatisfaction are

more likely to switch employers and are more likely to become unemployed than are those who were

satisfied with the arrangement. Unfortunately, in most cases, we do not know whether those switching

employers found employment in their desired arrangement.9

 8

Independent contractors are quite broadly defined in the CPS data to include independent contractors,

independent consultants, and freelance workers and, unlike contract company workers, are not restricted to those

who work primarily on the client's premises or work primarily for a single client. Given this definition, it is

perhaps not surprising that their labor force patterns resemble those of the regular self-employed.

9

In the case of part-time workers, we can tell if they work full-time hours with their new employer. For

agency temporaries, we could also check whether the new employer is in the temporary help services industry. 
17

The different labor market outcomes experienced by workers in flexible arrangements relative to

those in regular, full-time jobs may result from the nature of the arrangements themselves. Alternatively,

they may stem from differences in the average personal and job characteristics of individuals in those

arrangements. To control for personal and job characteristics, we estimated multinomial logit models using

the February 1995 to March 1995 matched data and the February 1995 to February 1996 matched data. In

the models estimated, there are four possible labor market outcomes: employed, same employer (Es);

employed, different employer (Ed); unemployed (U); and not in the labor force (N). To identify the model,

the coefficients for one outcome are set equal to zero, and the coefficients on the other outcomes are

interpreted as measuring the change relative to the base group. We use employed, same employer as the

base group in our models. In the models, the probability of each outcome is as follows:

0

where I = Ed, U, or N 

where X is a vector of control variables measuring personal and job characteristics and ß is a vector of

coefficient estimates. The effect of a one unit change in xi on the probability of a particular outcome

relative to the base outcome is just the exponentiated value of its coefficient estimate: 0. 

Selected coefficient estimates for the multinomial logit models predicting labor force status in

March 1995 and February 1996 are reported in Tables 7 and 8, respectively. In each set of specifications

we control for age, age-squared, gender, race, level of education, industry (19 industry breakdowns),

occupation (12 occupational breakdowns), region of the country, whether the individual is from the center

city or a rural area, whether the individual lived in a poverty area, marital status, marital status interacted

 

However, because many individuals who work for temporary help agencies report their client firm as their

employer, this analysis would have to be restricted to a subset of agency temporaries. Variation in industry coding

at the 3-digit level would also introduce error into the analysis of agency temporaries.
18

with gender, tenure on the job, and tenure-squared. Union status is also included in selected runs on the

February 1995 to February 1996 matched data. All of these variables are taken from the February 1995

CPS. In most specifications we also include a dummy variable measuring whether the individual reported

searching for a new job in the last three months or since starting in their current job or arrangement if this

had started within the last three months. We include dummy variables for each flexible work arrangement;

the excluded category is regular, full-time workers. In one specification we interact these work

arrangement dummies with a dummy variable capturing whether the individual is satisfied with his or her

work arrangement. The broad definitions for contract company workers and direct hire temporaries are

used in all specifications in Tables 7 and 8. 

Unmeasured personal characteristics may account for any greater incidence of job switching or

unemployment experienced among those in flexible arrangements. Unfortunately, we only observe

individuals’ work arrangement at one point in time; thus we cannot compare individuals’ propensity to

change employers, become unemployed, or drop out of the labor force when they are in flexible

arrangements versus when they are in regular, full-time arrangements. However, Segal and Sullivan

(1997b), using longitudinal administrative records data, are able to control for individual fixed effects in a

study of employment changes among agency temporaries. They find that controlling for individual fixed

effects has little impact in their model; workers in the temporary help industry are much more likely than

other workers to experience short employment spells. 

Moreover, in our data we are able to control for measures of job history that arguably capture an

individual’s tendency to change employers, experience spells of unemployment, or drop out of the labor

force. In the February 1995 Supplement, those who had three or less years of tenure in their current

arrangement were asked a series of questions about what they were doing prior to their current

arrangement. In certain specifications, we include controls for whether the individual held another job,

whether they lost a job, and whether they were unemployed just prior to their current job. Those who had
19

more than three years of tenure were coded as not having been employed in another job, lost a job, or been

unemployed in the previous three years. We also include controls for the number of employers individuals

had in 1994, the number of weeks they were unemployed in 1994, and the number of weeks they were out

of the labor force in 1994 in certain specifications. These variables come from the March 1995 CPS

Income Supplement.10

Finally, we include the logarithm of the hourly wage in certain specifications. The wage variable

may be correlated with unmeasured characteristics affecting worker quality and stability in the work force.

 Alternatively, workers earning low wages relative to their education, tenure, and job characteristics may be

more inclined to quit and find a new job, quit and become unemployed, or drop out of the labor force. The

hourly wage measure was constructed either from wage data collected in the February 1995 CPS or from

the earnings data for 1994 in the March 1995 CPS Income Supplement.

The control variables in the multinomial logit models have the expected signs and many are

statistically significant. For example, those searching for a new job, not surprisingly, are more likely to

switch employers or become unemployed. Workers who had another job immediately prior to their current

one are more likely to change employers and those who lost a job immediately prior to their current one are

also more likely to become unemployed in the short and long term. The number of employers an individual

had in 1994 is positively associated with switching employers or becoming unemployed, and the number of

weeks a worker was unemployed in 1994 and the number of weeks the worker was out of the labor force in

1994 is positively related to the probability that he/she will switch employers, become unemployed, or drop

out of the labor force in both the short and long term. The logarithm of the worker’s hourly wage is

inversely related to the probability that he/she will change employers or drop out of the labor force. 

Although the inclusion of controls for individual and job characteristics, employment history, and

 10A more detailed discussion of the variables used in these analyses is contained the data appendix.
20

wage levels reduces the size and significance of some coefficients on the flexible arrangement dummy

variables, many of these coefficients remain large and statistically significant. Our estimates imply that

being an agency temporary, an on-call worker, a direct-hire temporary, or a contract company worker

increases the probability that a worker will switch employers in the short and long term. Being an

independent contractor increases the probability that a worker will change employers in the short term and

being a regular part-time worker increases the probability that the worker will change employers in the long

term. Agency temporaries, on-call workers, and direct-hire temporaries are significantly more likely to

become unemployed in the short and long term than are regular, full-time workers, and regular, part-time

workers are significantly more likely to become unemployed in the long term in most specifications. 

Independent contractors and regular self-employed are significantly less likely to become unemployed in the

long term in some specifications. 

In addition, on-call workers, direct-hire temporaries, regular self-employed, and regular part-time

workers are more likely than regular full-time workers to drop out of the labor force in both the short and

long term; independent contractors are more likely to drop out of the labor force in the short term. These

results by themselves are difficult to interpret. On the one hand, certain flexible work arrangements may be

amenable to balancing family and work responsibilities or make good bridge jobs for retirement, and

therefore a larger proportion of workers in these arrangements may voluntarily drop out of the labor force

over the course of the year. On the other hand, workers in flexible arrangements may be more likely to lose

their job and drop out of the labor force even though they would prefer to work. To address this issue we

estimated multinominal logit models with four possible labor status outcomes--employed; unemployed; not

in the labor force, don't want to be; and not in the labor force, want to be--on the February 1995 to

February 1996 matched data. In these models, on-call workers, direct-hire temporaries, and, in most

specifications, regular part-time workers are significantly more likely to involuntarily drop out of the labor
21

force than are regular, full-time workers.11

The final specification in Tables 7 and 8 includes the interaction of the work arrangement dummy

variable with whether the worker was satisfied with that particular arrangement. As expected, workers

who are satisfied are less likely to change employers or become unemployed, though these interaction terms

usually are statistically insignificant in the models estimated on the February 1995 to February 1996 data.12

The point estimates on the flexible staffing dummy variables often imply quite large differences in

the labor market outcomes of workers in flexible arrangements compared with those of regular, full-time

workers. For example, estimates from Table 8 indicate that agency temporaries are four to six times more

likely and on-call and direct-hire temporaries are two to three times more likely than regular, full-time

workers to have changed employers one year later. Agency temporaries are five to seven times more likely

and on-call and direct hire temporaries are three to five times more likely to be unemployed one year later

than are regular, full-time workers. 

It is also interesting to note that agency temporary, on-call, and direct hire temporary employment

generally appears significantly less stable than regular part-time employment. Agency temporaries (in most

specifications), on-call workers, and direct-hire temporaries are significantly more likely than regular parttime workers to become unemployed or change employers in the short and long term. In contrast,

independent contractors are less likely to become unemployed in the long term, are less likely to drop out of

 11These results, reported in Table A3, included the same set of control variables as the equations reported

in Table 8. Because there were no individuals in the category “not in the labor force, want to be” for certain work

arrangements in March 1995, these models could not be run on the February 1995 to March 1995 matched data.

12All of our specifications include a dummy variable for gender. We also estimated a specification that

included the interaction of our work arrangement dummy variables with gender. These interaction terms were

insignificantly different from zero in almost cases.
22

the labor force in the short term, are but more likely to drop out of the labor force in the long term. 

The broad definitions for contract company workers and direct-hire temporaries are used in Tables

7 and 8. Table 9 reports the coefficient estimates on the contract company worker and direct-hire

temporary dummy variables from models using the narrow definitions for these two arrangements.13 In the

narrow definition of contract company workers, workers must not only work at the client's site, but must

also work primarily for just one client. In the narrow definition of direct-hire temporaries, workers must

explicitly state that their jobs are temporary; in the broad definition they could also state that they could not

stay in their jobs as long as they wished for reasons suggesting that they were indeed temporary. The most

interesting results from these tables are for the contract workers in the models predicting labor force status

in February 1996. When using the narrow definition, contract workers are significantly more likely to

change employers, and, unlike in the broad definition, to become unemployed and drop out of the labor

force in the long term than are regular, full-time workers. Direct-hire temporaries continue to be

significantly more likely to change employers, become unemployed, and drop out of the labor force in the

short and long term under the narrow definition.

Conclusion

We set out in this paper to examine whether workers in a wide variety of flexible work

arrangements experience less job and employment stability as a consequence of those arrangements. Our

evidence suggests that while concern over the implications of flexible work arrangements for job and

employment stability is warranted, it is important to distinguish between types of arrangements. 

Evidence of a reduction in job and employment stability is clearest for agency temporaries, directhire temporaries, and on-call workers. Results from the Upjohn Institute employer survey show that,

except possibly for agency temporaries, the use of flexible arrangements to screen workers for permanent

 13The coefficient estimates on the other variables are negligibly different from those in Tables 7 and 8.
23

jobs is not an important phenomenon. In fact, evidence from the February 1995 CPS Supplement suggests

that companies also often move workers from regular into flexible arrangements. Moreover, workers in

these arrangements are more likely to change employers, become unemployed, or, in the case of on-call

workers and direct-hire temporaries, involuntarily drop out of the labor force in the short and long run. 

These results hold up even after controlling for individual and job characteristics, job histories, and wages.

 An important caveat to note is that the results for agency temporaries only pertain to those who accurately

reported their employer as the temporary help agency in the basic CPS. Interestingly, workers in

temporary agency, on-call, and direct-hire temporary arrangements tend to be the least satisfied with their

arrangement.

We also find considerable evidence of job and employment instability for those in regular, parttime jobs. Regular, part-time workers are more likely than regular, full-time workers to change employers,

become unemployed, and involuntarily drop out of the labor force, particularly in the long run. While most

part-time workers desire part-time hours, a significant minority state that they want full-time jobs. Despite

the greater job and employment instability of part-time workers compared to full-time workers, however,

their employment is significantly more stable than the employment of agency temporaries, on-call workers,

and direct-hire temporaries in that they are less likely to become unemployed or change employers. 

Evidence of job and employment instability for contract company workers is somewhat weaker. 

Using our broad definition, contract workers appear significantly more likely to switch employers in the

short and the long run, but they are not more likely to become unemployed or to drop out of the labor force.

 Using our narrow definition in which contract workers not only work at the client’s site but also work

primarily for one client, contract workers are more likely to switch employers and to become unemployed in

the short and the long run. 

Finally, we find little evidence that the jobs and employment of independent contractors are less

stable than those of regular, full-time workers. Like the regular, self-employed, they tend to be quite
24

satisfied with their employment arrangement, and although they are more likely to drop out of the labor

force in the short and long run, this change in labor force status appears largely voluntary. One caveat to

this conclusion is that independent contractors, as classified in the CPS, constitute a large and probably

quite diverse group of individuals. 

In sum, agency temporaries, on-call workers, direct-hire temporaries, regular part-time workers,

and certain types of contract workers are more likely to change employers, and, perhaps more importantly,

to experience unemployment or involuntarily drop out of the labor force than are regular full-time workers.

 Although employer survey evidence often points to substantial employment growth in most types of

flexible arrangements, apart from agency temporary and part-time work, we lack hard data on the recent

employment trends in these arrangements. Thus, it is impossible to quantify the extent to which flexible

work arrangements have contributed to any increase in job or employment instability in the past. Future

supplements on contingent and alternative work arrangements to the CPS should help to fill this

information gap in the coming years. The results presented here do indicate, however, that the effect of

flexible arrangements on job security bear watching. 
25

References

Abraham, Katharine G. 1990. “Restructuring the Employment Relationship: The Growth of MarketMediated Work Arrangements.” In Katharine Abraham and Robert McKersie, eds., New

Developments in the Labor Market: Toward a New Institutional Paradigm. Cambridge, MA:

MIT Press, pp. 85-120.

Abraham, Katharine G. and Susan K. Taylor. 1996. “Firms’ Use of Outside Contractors: Theory and

Evidence.” Journal of Labor Economics, 14 (3): 394-424.

Blank, Rebecca M. 1994. “The Dynamics of Part-Time Work.” NBER Working Paper No. 4911,

Cambridge, MA: National Bureau of Economic Research.

Houseman, Susan N. 1997a. “Temporary, Part-Time, and Contract Employment in the United States: A

Report on the W. E. Upjohn Institute’s Employer Survey on Flexible Staffing Policies.” Final

report, prepared by the W. E. Upjohn Institute for the U.S. Department of Labor, June.

 . 1997b. “Temporary, Part-Time, and Contract Employment in the United States: New Evidence

from an Employer Survey.” Unpublished conference paper, June.

National Association of Temporary Services. 1994. “Temporary help/staffing services industry continues

to create employment opportunities,” press release.

Polivka, Anne E. 1996. “Contingent and Alternative Work Arrangements, Defined.” Monthly Labor

Review 119 (10), October: 3-9.

Polivka, Anne E. and Stephen M. Miller. 1995. “The CPS After the Redesign: Refocusing the Economic

Lens.” Bureau of Labor Statistics Working Paper 269, March.

Segal, Lewis M. and Daniel G. Sullivan. 1997a. “The Growth of Temporary Services Work.” Journal of

Economic Perspectives 11 (2), Spring: 117-36.

 . 1997b. “The Nature of Temporary Services Employment: Evidence from State UI Data.”

 Federal Reserve Bank of Chicago unpublished paper, December.

U.S. Department of Labor. 1997. “ Contingent and Alternative Employment Arrangements, February

1997,” Bureau of Labor Statistics, news release no. 97-422.
DATA APPENDIX FOR THE CPS

Longitudinal Matching and Weighting

Because of a phasing in of a new area sample, household identifications on the public use tapes were

generated such that households starting in May 1995 could not be matched forward. All longitudinal data

reported in this paper were constructed using internal BLS data containing household identification numbers

and unique person identification numbers for individuals within a household.

Households in the CPS are interviewed for four consecutive months, not interviewed for the next 8

months, and are then interviewed for 4 more consecutive months. In each calendar month of the year a new

group of households is administered its first monthly interview. Given this structure, it is theoretically

possible to match 75 percent of the households in consecutive calendar months and 50 percent of the

households in months one year apart. In practice, a lower match rate results from the fact that the sample is

based on addresses and some households or individuals within households move. A slightly lower match rate

than can be accounted for by moving was obtained for February 1995 to February 1996 because starting in

January 1996 the sample of both new and continuing households in the CPS was reduced by approximately

12 percent. Of those who were not in their fourth or eighth interview and were employed in February 1995,

96.3 percent had a valid record to which they could be matched in March 1995. Of those who were in the

first half of their interviewing rotations (interviews 1 through 4) and were employed in February 1995, 67.1

percent were matched to a valid record in February 1996.

To account for the reduction in observations caused by the rotation pattern of interviewing, attrition,

and the overall reduction in the CPS sample instituted in January 1996, the February 1995 supplement

weights for individuals in a particular group were multiplied by the ratio of the weighted number of

individuals in that particular group in February 1995 to the weighted number of individuals in the same group

in the month being matched to, for instance February 1996. Ratios were calculated for eight gender, age and

race groups (i.e., male, white, greater than 25 years old; male, nonwhite, greater than 25 years of age; etc.). 

Because comparisons were being made based on individuals' February 1995 work arrangements, the weighted
counts used to calculate the ratios were generated using the February 1995 weights to emulate the

representative distribution of workers in February 1995. The transition data by rotation group should not be

subject to the rotation group bias discussed in Abowd and Zellner (19xx) because all individuals started out

as employed and the incidence of flexible arrangements did not vary significantly by rotation group. 

Longitudinal Matching and the Use of Variables

 Some of the data used in our analysis were only collected in the supplement or for a proportion of the

sample in the basic CPS. Specifically, information about unionization and earnings on the current job was

collected for all workers in flexible arrangements as part of the supplement, but it was only collected as part

of the basic CPS for regular full-time and regular part-time workers in their fourth and eighth interviews. 

This data collection scheme means that the February 1995 wage and unionization data cannot be used in the

February 1995-March 1995 data set. Instead hourly earnings for the February-March 1995 data set were

constructed using data from the March income supplement which inquires about earnings in the previous

year. Using data on 1994 earnings from the March 1995 CPS has the drawback that we must exclude those

who worked in February 1995 but who report no earnings the previous year. Inclusion of the March earnings

variable, however, generally has little effect on the size and significance of the other coefficients in the model.

 An indicator of unionization was not used in the models estimated on the February 1995-March 1995 data. 

In the February 1995 -February 1996 matched data set it is possible to include both a unionization

variable and an hourly earnings variable (constructed from information collected either in the supplement or

for workers in their outgoing rotations). Given the rotation pattern, when March 1995 variables are included

in the February 1995-February 1996 data, the February 1995 earnings and unionization variable cannot be

used. Consequently, when March variables and earnings variables are both included, the earnings variable is

derived from the March income supplement. In addition because of the rotation pattern, the merging in of

March 1995 variables reduces the sample size of the February 1995-February 1996 data set by about a

quarter. 
Definition of Selected Variables

Satisfaction with Current Arrangement

Direct hire temps, on-call workers, day laborers, independent contractors, and other self-employed

were asked questions in the February 1995 supplement to ascertain their satisfaction with their current work

arrangements. Specifically, temporary workers were asked if they would prefer a permanent job, on-call and

day laborers were asked if they prefer would regularly scheduled hours, and independent contractors and other

self-employed were asked if they would prefer to work for someone else rather than being self-employed. If

workers in these arrangements responded affirmatively, we classified them as dissatisfied with their current

arrangement. 

Part-time workers’ satisfaction was ascertained from the monthly CPS where they were asked

whether they wanted to work a full-time workweek of 35 hours or more. . Using the response to this question

to measure dissatisfaction with part-time work is broader than the official measure of workers who are part

time for economic reasons. Under the BLS definition of part-time for economic reasons, an individual must

not only give an economic reason for working part time, but must also say that they are available to work full

time. We used the broader measure of dissatisfaction for part-time workers because it is closer to the

measures of dissatisfaction used for those in other flexible work arrangements. 

Contract company workers were classified as dissatisfied with their arrangement if they reported that

they had been searching for another primary job as something other than a contract company worker. This

measure likely understates the number who are dissatisfied with being a contract worker, however. Workers

in other flexible arrangements were also asked if they were looking for another primary job in a different

arrangement. Those answering in the affirmative were a subset of those expressing dissatisfaction with their

current arrangement when asked directly. Information on job satisfaction was not collected for workers in

regular full-time arrangements. 

Living in a Poverty Area

A poverty area is defined as a census tract in which more than 20 percent of the households had
income below the poverty level in 1990.

Job Tenure

Job tenure in February 1995 for those who were agency temporaries, contract company workers, or

on-call workers is defined as how long individuals had worked for the temporary help agency or a contract

company, or had been an on-call worker rather than how long they had been at a particular assignment. 

Independent contractors and the self-employed were asked how long they had been in these arrangements. In

the February 1996 tenure supplement wage and salary workers were asked how long they had worked for the

employer identified as their current and main employer in the monthly CPS. The self-employed were asked

how long they had been self employed. 

Searching for a New Job

Individuals who were on-call, agency temporaries, or contract company workers were asked if they were

looking for a job in a different work arrangement. The self-employed and independent contracts were asked if

they were looking for a job in which they would be someone else's employee. Regular full-time and regular

part-time workers were simply asked if they were looking for other employment. In all cases individuals who

said that they were looking for work were asked if they were looking for a second job or a new job. Only

those who said they were looking for a new one were classified as having searched for another job. 

Being Switched to a Flexible Work Arrangement at Current Place of Work

Agency temporaries, on-call workers and contract company workers (under our narrow definition)

were asked if they had always worked at the place they were currently working in this arrangement. In

February 1995 only independent contractors who were identified as wage and salary workers were asked

about their previous status. In addition, in February 1997, independent contractors identified as

self-employed were asked, "Have you ever worked for one of your clients as something other than an

independent contractor?" The proportion of independent contractors who reported being switched was higher

in 1995 than in 1997. However, this is almost entirely attributable to the fact that only wage and salary

independent contractors were asked about their previous status. The percentage of workers in the other three
flexible work arrangements who said that their work arrangements had changed were higher or about the

same in 1995 compared to 1997.

Agency temporaries, on-call workers, contract company workers, and wage and salary independent

contractors were asked directly in both 1995 and 1997 how long they had worked at their current place of

employment prior to being switched. Tenure prior to being switched for independent contractors identified as

self employed was less precisely derived from a series of questions asked of those who had been independent

contractors for no more than three years. In these questions independent contractors who stated that they had

been employed directly prior to becoming an independent contractor were asked how long they had worked in

this other job. 
Table 1. Employment by Work Arrangement

Percent of all

workers

Percent

dissatisfied with

arrangement

Percent with

tenure 1 year

or less

Percent of all

workers with tenure

1 year or less

Agency temporaries 1.0 64.2 75.1 2.7

On-call workers 1.7 61.1 47.4 3.0

Direct-hire temporaries

(broad)

(narrow)

2.7

2.1

48.4

53.4

57.8

65.3

6.0

5.2

Contract workers

(broad)

(narrow)

0.9

0.5

17.2

22.2

43.1

49.8

1.5

0.9

Independent contractors 6.7 10.6 17.3 4.4

Regular self-employed 5.9 7.3 12.2 2.6

Regular part-time 13.6 21.8 46.6 23.7

Regular full-time 67.5 -- 22.2 56.2

Source: Authors’ tabulations using February 1995 CPS. Unpaid workers and those in armed forces are

excluded from tabulations. All tabulations were weighted using the CPS Supplement weight.
Table 2. Summary of Evidence on Trends in Flexible Staffing Arrangements

Survey Sample Alternative Arrangements Covered Main ResultsCurrent Population Survey,BLS

monthly survey of about50,000 households

part-time employment1 Part-time employment grew from 14.5 % in 1969 to 16.4% in 1979 to 17.0%

in 1989; adjusted for changes to the CPS in 1994, part-time employment fell to16.2 percent in 1997.

Current EmploymentStatistics, BLS

monthly survey of about350,000 non-farmestablishments

help supply servicesemployment (primarilyagency temps)

Employment in help supply services grew from 0.5% to 2.0% of non-farmpayroll employment between 1982 and 1996. 

The Conference Board(1995)

91 Conference Boardmembers—large companiesoperating in the U.S. andabroad—conducted in 1995

direct-hire temporaries,independentcontractors, agencytemporaries, on-callworkers, leasedemployees

1/4 to 1/3 of companies reported sizable growth in their use of direct-hiretemps, independent contractors, and agency temps in last 5 years and expectedsizable growth in next 5 years. Few reported sizable growth or expectedsizable growth of on-call and leased employees. Among US-based companies,workers in these arrangements comprised 10% or more of workforce at 23%of firms at time of survey compared with just 12% of the firms 5 years before;35% expected they would comprise 10% or more of workforce 5 years infuture.

1986, 1987 Industry WageSurveys, BLS (Abraham andTaylor, 1997)

establishments in 13 manuf.industries

contracting out Questions on contracting out of five services (janitorial, machine maintenance,

engineering and drafting, and accounting services work) show increase inpropensity of establishments to contract out this work between 1979 and1986/87.

Bureau of National AffairsSurvey (Abraham, 1990)

441 BNA members—mostlylarge employers—conductedin 1985

agency temporaries,direct-hire temps, oncall workers,contracting out2

Larger percentage reported increase than reported decrease in use of agencytemps, direct-hire temps, on-call workers, administrative or business supportcontracts, and production subcontracting in 1985 than in 1980 relative toregular employment.

Upjohn Institute EmployerSurvey on Flexible StaffingArrangements [Houseman1997]

550 establishments—stratified random sampledesigned to be representativeof private sector—conductedin 1996

agency temporaries,direct-hire temps,regular part-timeworkers, on-callworkers, contractworkers2

Many more reported increase in contracting out and use of regular part-timeworkers than reported decrease relative to regular workers since 1990. Slightly more reported relative increase in use of agency temps, direct-hiretemps, and on-call workers since 1990. 2/3 of employers predicted use offlexible staffing arrangements would increase in their industry in next 5 years.

1 Because evidence from the February CPS Supplements suggests that many working for temporary help agencies give the client as their employer in the main CPS

questionnaire, we do not cite the CPS as a source of data on trends in the temporary help industry.

2 Contracting out services, information on which was collected in these surveys, is a somewhat broader practice that includes using contract company workers and

independent contractors.
Table 3. Reasons for Increased Use of Flexible Workers

Temporary Help

Agency Workers

ShortTerm

Hires

Part-Time

Workers

On-Call

Workers

Contract

Out

Percent Responding the Increase was Partly Due to:

Greater use of flexible workers to

screen candidates for permanent

jobs

24.2 3.3 -- -- --

Need to increase workforce

flexibility to better accommodate

fluctuations in workload

37.1 40.0 52.0 57.7 --

Competitive pressure to reduce

labor costs

3.2 16.7 15.3 11.5 40.0

Corporate restructuring or merger 4.8 13.3 3.1 7.7 5.3

Increase in benefits or social

insurance costs for regular

employees

1.6 6.7 12.2 3.9 --

Greater use of family medical leave

by regular employees

9.7 6.7 -- -- --

Difficulty finding qualified workers

on own

37.1 -- -- -- --

Business expansion 25.8 50.0 48.0 50.0 30.5

Business contraction 4.8 13.3 6.1 3.9 5.3

Change in the hours of operation -- -- 9.2 0.0 --

Introduction of new machinery or

equipment

-- -- 2.0 7.7 --

Inability to compete on price,

quality or market position

-- -- -- -- 26.3

Sample Size 62 30 98 26 95

Source: Upjohn Institute Employer Survey on Flexible Staffing Arrangements.
Table 4. Mobility of Flexible Workers into Regular Positions, by Type of Flexible Worker

Often Occasionally/

Sometimes Seldom Never Don’tKnow

Sample

Size

Agency temporaries 11.5 31.3 19.0 36.8 1.6 253

On-call workers 9.3 26.7 27.3 32.7 4.0 150

Direct-hire temporaries 9.0 34.3 17.1 38.6 1.0 210

Regular, Part-time workers 14.7 39.6 16.0 28.9 0.8 394

Source: Upjohn Institute Employer Survey on Flexible Staffing Arrangements
Table 5. Labor Force Status in March 1995 by Work Arrangement in February 19951

Status in March 1995

Employed Not in labor force

Status in February 1995 Total Different

employer

Unemployed Total Want to be in

labor force

Agency temporary2

 Dissatisfied

 Satisfied

87.6%

87.3

88.0

12.1%

13.9

9.0

7.9%

9.0

5.9

4.6%

3.7

6.0

2.3%

2.1

2.8

On-call

 Dissatisfied

 Satisfied

84.0

85.8

81.3

6.2

6.1

6.2

7.1

9.4

3.8

8.9

4.9

14.8

2.3

2.3

2.1

Direct hire temporary (broad)

 Dissatisfied

 Satisfied

88.6

87.7

89.5

5.8

7.5

4.1

4.4

6.9

2.0

7.0

5.4

8.5

2.2

2.5

1.9

Direct hire temporary

(narrow)

 Dissatisfied

 Satisfied

87.1

87.3

86.9

6.2

6.8

5.4

4.9

7.0

2.2

8.0

5.7

10.9

2.3

2.3

2.4

Contract worker (broad)2

 Dissatisfied

 Satisfied

97.3

92.6

98.1

5.2

18.8

2.7

2.4

6.4

1.6

0.4

1.0

0.3

0.4

1.0

0.3

Contract worker (narrow)2

 Dissatisfied

 Satisfied

98.0

94.4

98.9

6.5

20.8

3.0

1.3

4.1

0.6

0.8

1.5

0.6

0.8

1.5

0.6

Independent contractor

 Dissatisfied

 Satisfied

94.8

91.7

95.1

3.2

6.2

2.8

1.5

5.5

1.1

3.8

2.9

3.8

1.0

1.0

1.0

Regular self-employed

 Dissatisfied

 Satisfied

94.6

88.5

95.2

2.5

6.1

2.2

0.7

3.1

0.5

4.6

8.5

4.3

0.6

2.8

0.5

Regular part-time

 Dissatisfied

 Satisfied

93.6

92.8

93.8

3.1

5.4

2.5

2.0

4.6

1.3

4.5

2.6

5.0

1.2

1.1

1.2

1

 The percentages in these tables are based on weighted tabulations. A data appendix, available from the

authors, describes the construction of these weights.

2

 Excludes individuals misreporting their employer in the basic February 1995 CPS.
Table 6. Labor Force Status in February 1996 by Work Arrangement in February 19951

Status in February 1996

Employed Not in labor force

Total Different

employer

Unemployed Total Want to be in

labor force

Agency Temporary2

 Dissatisfied

 Satisfied

78.3%

76.0

85.0

43.7%

45.4

38.6

10.2%

11.7

5.7

11.5%

12.3

9.4

1.7%

2.3

0

On-call workers

 Dissatisfied

 Satisfied

73.4

76.6

69.1

214

29.0

11.2

10.7

12.4

8.4

15.8

11.0

22.5

3.4

3.6

3.1

Direct-hire temporary (broad)

 Dissatisfied

 Satisfied

76.6

76.0

77.2

24.2

28.1

20.8

6.2

10.0

2.8

17.2

14.0

20.1

2.8

4.4

1.4

Direct-hire temporary (narrow)

 Dissatisfied

 Satisfied

71.8

74.5

68.9

26.7

29.6

23.6

7.8

11.4

4.0

20.4

14.1

27.2

3.2

4.2

2.0

Contract workers (broad)2

 Dissatisfied

 Satisfied

87.8

95.2

86.6

20.4

47.9

16.0

4.3

0.5

4.9

7.9

4.3

8.5

3.8

0.9

4.3

Contract workers (narrow)2

 Dissatisfied

 Satisfied

83.4

94.3

81.4

24.0

60.4

17.4

5.4

0

6.4

11.2

5.7

12.2

6.7

0

8.0

Independent contractor

 Dissatisfied

 Satisfied

90.6

86.8

91.0

8.6

23.3

7.0

1.4

3.9

1.2

7.9

9.3

7.8

1.2

4.0

0.9

Regular self-employed

 Dissatisfied

 Satisfied

87.0

76.5

87.8

6.9

27.9

5.2

1.1

2.3

1.0

11.9

21.3

11.2

0.4

0

0.4

Regular part-time

 Dissatisfied

 Satisfied

77.2

77.7

77.1

18.5

24.8

17.0

4.5

9.7

3.3

18.3

12.6

19.7

2.7

3.4

2.6

1

 The percentages in these tables are based on weighted tabulations. A data appendix, available from the authors,

describes the construction of these weights.

2

 Excludes individuals misreporting their employer in the basic February 1995 CPS.
Table 7. Multinomial Logit Models Predicting Labor Force Status in March 19961

Employed Different Employer Unemployed Not in Labor Force

(1) (2) (3) (4) (5) (1) (2) (3) (4) (5) (1) (2) (3) (4) (5)

Searching new job -- 1.674*** 1.647*** 1.670*** -- -- 1.287*** 1.216*** 1.172*** -- -- -0.216 -0.098 -0.135 --Another job before -- 0.252** 0.240** 0.171 0.315*** -- 0.143 0.381*** 0.355** 0.163 -- -0.450*** 0.272** 0.154 -0.420***Unemployed before -- 0.241* 0.189 0.196 0.349** -- 0.351** 0.111 0.056 0.366** -- -0.052 -0.317** -0.313 0.025Lost job before -- -0.049 -0.103 -0.049 0.064 -- 0.269* 0.120 0.153 0.343** -- 0.131 -0.015 0.098 0.145Number employers ‘94 -- -- 0.304*** 0.352*** -- -- -- 0.087 0.138* -- -- -- -0.206*** 0.009 --Weeks unemployed ‘94 -- -- 0.015*** 0.014*** -- -- -- 0.052*** 0.052*** -- -- -- 0.049*** 0.037*** --Weeks NILF ‘94 -- -- 0.014*** 0.010** -- -- -- 0.034*** 0.032*** -- -- -- 0.077*** 0.070*** --ln(wage) -- -- -- -0.040 -- -- -- -- -0.180* -- -- -- -- -0.053 --Agency temporary 1.337*** 0.741** 0.571* 0.680** 1.553*** 1.822*** 1.334*** 1.078*** 0.793* 1.940*** 1.479*** 1.547*** 0.759 0.654 0.872 * satisfied -- -- -- -- -0.937 -- -- -- -- -0.580 -- -- -- -- 1.127On-call workers 1.093*** 0.867*** 0.720*** 0.562*** 1.118*** 1.886*** 1.673*** 1.338*** 1.299*** 1.983*** 2.176*** 2.123*** 1.350*** 1.520*** 1.414*** * satisfied -- -- -- -- -0.021*** -- -- -- -- -0.445 -- -- -- -- 1.214***Direct-hire temporary 0.843*** 0.658*** 0.519*** 0.488*** 1.057*** 1.506*** 1.342*** 1.078*** 1.112*** 1.799*** 1.813*** 1.794*** 0.984*** 1.110*** 1.430*** * satisfied -- -- -- -- -0.479* -- -- -- -- -0.945*** -- -- -- -- 0.581**Contract worker 0.657** 0.565** 0.504* 0.556** 2.195*** 0.625* 0.573 0.405 0.347 1.899*** -0.400 -0.402 -0.603 -0.098 1.208 * satisfied -- -- -- -- -2.174*** -- -- -- -- -1.615** -- -- -- -- -2.218Independent contractor 0.564*** 0.586*** 0.547*** 0.629*** 1.098*** 0.358* 0.364* 0.213 0.010 1.330*** 1.475*** 1.448*** 0.933*** 1.283*** 1.062*** * satisfied -- -- -- -- -0.626** -- -- -- -- -1.237*** -- -- -- -- 0.441Regular self-employed 0.264* 0.350** 0.335** 0.292 1.447*** 0.125 0.162 0.052 -0.276 1.298*** 1.542*** 1.507*** 0.852*** 1.215*** 2.191*** * satisfied -- -- -- -- -1.366** -- -- -- -- -1.445*** -- -- -- -- -0.742**Regular part-time 0.155 0.131 0.070 -0.028 0.692*** 0.443*** 0.396*** 0.213 0.095 1.000*** 0.969*** 0.930*** 0.435*** 0.566*** 0.414* * satisfied -- -- -- -- -0.758*** -- -- -- -- -0.902*** -- -- -- -- -0.626***

1All models also include an intercept term and controlled for age, age-squared, gender, race, education, tenure, tenure-squared, occupation, industry, region, central city and rural

location, marital status, and marital status interacted with gender. * denotes significance at .10 level; ** denotes significance at .05 level; *** denotes significance at .001 level.
Table 8 . Multinomial Logit Models Predicting Labor Force Status in February 19961

Employed, Different Employer Unemployed Not in Labor Force

(1) (2) (3) (4) (5) (6) (1) (2) (3) (4) (5) (6) (1) (2) (3) (4) (5) (6)

Searching new job -- 1.252*** 1.225*** 1.259*** 1.267*** -- -- 0.983*** 0.895*** 0.789*** 0.840*** -- -- 0.554*** 0.197 0.683*** 0.640*** --Another job before -- 0.196** 0.247** 0.266*** 0.229** 0.231*** -- -0.001 -0.374 0.171 0.113 0.017 -- -0.251** -0.640*** -0.019 -0.033 -0.234**Unemployed before -- 0.054 -0.076 0.003 -0.106 0.086 -- 0.572*** 0.398 0.317 0.277 0.575*** -- 0.009 -0.299 -0.143 -0.096 0.045Lost job before -- -0.030 -0.254 0.034 0.085 -0.010 -- 0.457*** 0.668** 0.428** 0.505** 0.459*** -- 0.099 0.079 0.025 0.012 0.109Number employers ‘94 -- -- -- 0.280*** 0.311*** -- -- -- -- 0.293*** 0.279** -- -- -- -- -0.114 -0.083 --Weeks unemployed ‘94 -- -- -- 0.016*** 0.013** -- -- -- -- 0.050*** 0.050*** -- -- -- -- 0.031*** 0.024*** --Weeks NILF ‘94 -- -- -- 0.020*** 0.017*** -- -- -- -- 0.031*** 0.024*** -- -- -- -- 0.037*** 0.034*** --ln(wage) -- -- -0.179** -- -0.127* -- -- -- -0.061 -- 0.034 -- -- -- -0.246** -- -0.139* --Agency temporary 1.856*** 1.551*** 1.358*** 1.623*** 1.562*** 1.963*** 1.971*** 1.762*** 1.616*** 1.775*** 1.189 2.023*** 0.852 0.780 1.079 0.419 0.702 0.550 * satisfied -- -- -- -- -- -0.426 -- -- -- -- -- -0.069 -- -- -- -- -- 0.835On-call workers 1.046*** 0.969*** 0.912*** 0.832*** 0.918*** 1.386*** 1.630*** 1.536*** 1.335*** 1.211*** 1.425*** 1.515*** 1.458*** 1.390*** 1.643*** 0.985*** 0.705*** 1.387*** * satisfied -- -- -- -- -- -0.869** -- -- -- -- -- 0.262 -- -- -- -- -- 0.057Direct-hire temporary 1.092*** 0.991*** 0.959*** 0.874*** 0.824*** 1.310*** 1.504*** 1.349*** 1.260*** 1.113*** 1.146*** 1.638*** 1.699*** 1.638*** 2.030*** 1.349*** 1.217*** 1.521*** * satisfied -- -- -- -- -- -0.444 -- -- -- -- -- -0.491 -- -- -- -- -- 0.274Contract worker 0.662*** 0.624** 0.532** 0.644** 0.634** 2.347*** 0.935** 0.895** 0.780* 0.696 0.558 1.663 0.553 0.533 0.712 0.352 0.304 1.291 * satisfied -- -- -- -- -- -2.057*** -- -- -- -- -- -0.801 -- -- -- -- -- -0.810Independent contractor 0.175 0.170 0.041 0.101 0.134 1.079*** -0.664** -0.667** -0.822* -0.695** -0.528 0.778* 0.423*** 0.408*** 0.464** 0.155 0.113 0.625 * satisfied -- -- -- -- -- -1.046*** -- -- -- -- -- -1.808*** -- -- -- -- -- -0.227Regular self-employed -0.014 0.054 -0.159 -0.025 -0.134 1.221*** -0.552* -0.491 -0.763** -0.164 -0.064 0.481 0.778*** 0.774*** 0.719*** 0.667*** 0.627*** 1.711*** * satisfied -- -- --- -- -1.360*** -- -- -- -- -1.100 -- -- -- -- -1.032***Regular part-time 0.305*** 0.314*** 0.155 0.303*** 0.279*** 0.669*** 0.494*** 0.468*** 0.303 0.483*** 0.507** 1.046*** 0.995*** 0.970*** 0.851*** 0.867*** 0.830*** 1.002*** * satisfied -- -- -- -- -- -0.445*** -- -- -- -- -- -0.796*** -- -- -- -- -- -0.0271All models also include an intercept term and controlled for age, age-squared, gender, race, education, tenure, tenure-squared, occupation, industry, region, central city and rural

location, marital status, and marital status interacted with gender. * denotes significance at .10 level; ** denotes significance at .05 level; *** denotes significance at .001 level.
Table 9 Multinomial Logit Models Predicting Labor Force Status in March 1996 and February 1997: Narrow Definitions for Direct-Hire

Temporaries and Contract Workers1

March 1996 February 1997

(1) (2) (3) (4) (1) (2) (3) (4) (5)

Employed Different Employer

Direct-hire temporary 0.820*** 0.595*** 0.434** 0.386** 1.122*** 0.991*** 0.843*** 0.825*** 0.788***Contract worker 0.870** 0.722* 0.623 0.655* 0.930*** 0.922*** 0.862** 0.938** 0.923**

Unemployed

Direct-hire temporary 1.476*** 1.285*** 0.994*** 0.979*** 1.707*** 1.517*** 1.296*** 1.243*** 1.280***Contract worker -0.616 -0.720 -0.949 -0.863 1.417** 1.357** 1.183** 1.113* 1.180**

Not in Labor Force

Direct-hire temporary 1.825*** 1.814*** 0.940*** 1.114*** 1.457*** 1.391*** 1.632 0.989*** 0.715***Contract worker 0.426 0.397 0.307 0.798 1.834*** 1.763*** 2.052*** 1.454*** 1.332***

1 The specifications correspond to those in Tables 7 and 8.
Table A1. Multinomial Logit Models Predicting Labor Force Status in March 19961

Employed, Different Employer

(1) (2) (3) (4) (5)

Agency temporary

 * satisfied

1.181***

--

0.604*

--

0.497

--

0.718**

--

0.860**

-0.921

On-call workers

 * satisfied

0.946***

--

0.743***

--

0.659***

--

0.607***

--

0.439*

-0.028

Direct-hire temporary

 * satisfied

0.688***

--

0.529***

--

0.453***

--

0.528***

--

0.369

-0.485*

Contract worker

 * satisfied

0.532*

--

0.459

--

0.457

--

0.621**

--

1.523***

-2.162***

Independent contractor

 * satisfied

-0.048

--

-0.010

--

0.008

--

0.255

--

-0.050

-0.632*

Regular self-employed

 * satisfied

-0.395*

--

-0.288

--

-0.245

--

-0.156

--

0.712**

-2.027***

Regular full-time

Regular part-time satisfied

-0.145

--

-0.120

--

-0.064

--

0.042

--

-0.683***

-0.759***

Unemployed

(1) (2) (3) (4) (5)

Agency temporary

 * satisfied

1.379**

--

0.941***

--

0.870**

--

0.703

--

0.940**

-0.579

On-call workers

 * satisfied

1.443***

--

1.278***

--

1.127***

--

1.205***

--

0.983***

-0.445

Direct-hire temporary

 * satisfied

1.063***

--

0.947***

--

0.866***

--

1.018***

--

0.799***

-0.945***

Contract worker

 * satisfied

0.184

--

0.181

--

0.196

--

0.255

--

0.901

-1.615**

Independent contractor

 * satisfied

-0.103

--

-0.056

--

-0.028

--

-0.023

--

0.297

-1.220***

Regular self-employed

 * satisfied

-0.331

--

-0.251

--

-0.181

--

-0.389

--

0.291

-1.449***

Regular full-time

Regular part-time satisfied

-0.443***

--

-0.396***

--

-0.214

--

-0.096

--

-1.000***

-0.902**

Not in Labor Force

(1) (2) (3) (4) (5)

Agency temporary

 * satisfied

0.511

--

0.619

--

0.326

--

0.091

--

0.459

1.127

On-call workers

 * satisfied

1.208***

--

1.194***

--

0.917***

--

0.955***

--

1.000***

1.214***

Direct-hire temporary

 * satisfied

0.845***

--

0.865***

--

0.550***

--

0.545**

--

1.016***

0.581**

Contract worker

 * satisfied

-1.368*

--

-1.330*

--

-1.037

--

-0.662

--

0.796

-2.218

Independent contractor

 * satisfied

0.491***

--

0.504***

--

0.481***

--

0.701***

--

0.619

0.457

Regular self-employed

 * satisfied

0.562***

--

0.567***

--

0.404**

--

0.638***

--

1.768***

-0.745**

Regular full-time

Regular part-time satisfied

-0.969***

--

-0.930***

--

-0.436***

--

-0.567***

--

-0.415*

0.625*** 1

 The omitted flexible staffing dummy variable is regular part-time worker. Otherwise, the specifications correspond to

those in Table 7.
Table A2. Multinomial Logit Models Predicting Labor Force Status in February 19961

Employed, Different Employer

(1) (2) (3) (4) (5) (6)

Agency temporary

 * satisfied

1.552***

--

1.237***

--

1.203***

--

1.320***

--

1.282***

--

1.294***

-0.426

On-call workers

 * satisfied

0.742***

--

0.654***

--

0.757***

--

0.528***

--

0.638***

--

0.718***

-0.869**

Direct-hire temporary

 * satisfied

0.787***

--

0.676***

--

0.805***

--

0.571***

--

0.544***

--

0.642***

-0.444

Contract worker

 * satisfied

0.357

--

0.310

--

0.378

--

0.340

--

0.354

--

1.679***

-2.057***

Independent contractor

 * satisfied

-0.130

--

-0.144

--

-0.114

--

-0.203

--

-0.146

--

0.411

-1.046***

Regular self-employed

 * satisfied

-0.318**

--

-0.261*

--

-0.314

--

-0.328*

--

-0.413**

--

0.553

-1.360***

Regular full-time

Regular part-time satisfied

-0.305***

--

-0.314***

--

-0.155

--

-0.303***

--

-0.279***

--

-0.669***

-0.445***

Unemployed

(1) (2) (3) (4) (5) (6)

Agency temporary

 * satisfied

1.477**

--

1.294**

--

1.312**

--

1.292**

--

0.682

--

0.977

-0.069

On-call workers

 * satisfied

1.136***

--

1.068***

--

1.032***

--

0.728**

--

0.918***

--

0.469

0.262

Direct-hire temporary

 * satisfied

1.010***

--

0.881***

--

0.956***

--

0.630**

--

0.639**

--

0.593*

-0.491

Contract worker

 * satisfied

0.441

--

0.427

--

0.477

--

0.213

--

0.051

--

0.617

-0.801

Independent contractor

 * satisfied

-1.158***

--

-1.135***

--

-1.125***

--

-1.178***

--

-1.035***

--

-0.268

-1.808***

Regular self-employed

 * satisfied

-1.047***

--

-0.959***

--

-1.067***

--

-0.648*

--

-0.571

--

-0.565

-1.100

Regular full-time

Regular part-time satisfied

-0.494***

--

-0.468***

--

-0.303

--

-0.483***

--

-0.507**

--

-1.046***

-0.796***

Not in labor force

(1) (2) (3) (4) (5) (6)

Agency temporary

 * satisfied

-0.143

--

-0.190

--

0.228

--

-0.449

--

-0.128

--

-0.452

0.835

On-call workers

 * satisfied

0.464**

--

0.420**

--

0.792***

--

0.117

--

-0.125

--

0.385

0.057

Direct-hire temporary

 * satisfied

0.704***

--

0.669***

--

1.180***

--

0.482**

--

0.387*

--

0.519*

0.274

Contract worker

 * satisfied

-0.442

--

-0.437

--

-0.139

--

-0.516

--

-0.526

--

0.289

-0.810

Independent contractor

 * satisfied

-0.572***

--

-0.561***

--

-0.387*

--

-0.712***

--

-0.717***

--

-0.377

-0.227

Regular self-employed

 * satisfied

-0.217

--

-0.196

--

-0.132

--

-0.200

--

-0.202

--

0.709*

-1.032***

Regular full-time

Regular part-time satisfied

-0.995***

--

-0.970***

--

-0.851***

--

-0.867***

--

-0.830***

--

-1.002***

-0.027 1

 The omitted flexible staffing dummy variable is regular part-time workers. Otherwise, the specifications correspond to

those in Table 8.
Table A3. Multinomial Logit Models Predicting Labor Force Status in February 19961

(1) (2) (3) (4) (5)

Unemployed

Agency temporary 0.903** 0.642 0.594 0.523 0.423

On-call worker 1.387*** 1.287*** 1.105*** 1.050*** 1.229***

Direct-hire temporary 1.186*** 1.072*** 0.960*** 0.873*** 0.953***

Contract worker 0.771* 0.728* 0.622 0.602 0.454

Independent contractor -0.687** -0.686** -0.840*** -0.673** -0.515

Regular self-employed -0.567* -0.524* -0.799** -0.167 -0.056

Regular part time 0.425*** 0.401*** 0.268 0.435** 0.462**

Not in Labor Force, Don’t Want to Be

Agency temporary 0.822** 0.850** 1.233*** 0.850** 0.858**

On-call worker 1.213*** 1.173*** 1.505*** 1.173*** 0.421

Direct hire temporary 1.424*** 1.419*** 1.896*** 1.419*** 1.015***

Contract worker 0.349 0.356 0.684 0.356 0.203

Independent contractor 0.384*** 0.371** 0.497** 0.371** 0.119

Regular self-employed 0.873*** 0.851*** 0.827*** 0.851*** 0.707***

Regular part time 0.960*** 0.941*** 0.973*** 0.941*** 0.761***

Not in Labor Force, Want to Be

Agency temporary 0.549 0.305 0.808 -0.096 0.319

On-call workers 1.276*** 1.152*** 1.013** 1.006** 1.071**

Direct hire temporary 1.319*** 1.183*** 0.996** 0.978** 1.085**

Contract worker 0.526 0.479 0.282 0.361 -0.119

Independent contractor 0.419 0.397 0.100 0.116 -0.116

Regular self-employed -0.086 -0.067 -0.541 -0.118 -0.101

Regular part time 0.761*** 0.707*** -0.096 0.840*** 0.972***

1

 The specifications in columns 1 - 5 correspond to the specifications in columns 1 - 5 of Table 8.