Do temporary help jobs improve labor market outcomes for low-skilled workers?

the long version

Temporary-help jobs offer rapid entry into paid employment, but they are typically brief and it is unknown whether they foster longer-term employment. We utilize the unique structure of Detroit's welfare-to-work program to identify the effect of temporary-help jobs on labor market advancement. Exploiting the rotational assignment of welfare clients to numerous nonprofit contractors with differing job placement rates, we find that temporary-help job placements do not improve and may diminish subsequent earnings and employment outcomes among participants. In contrast, job placements with direct-hire employers substantially raise earnings and employment over a seven quarter follow-up period. Keywords: Temporary-help, welfare to work, job placement, low-skill workers, causal effects. JEL Classifications: J24, J48, J62.