Mind the gap, please! The effect of temporary help agencies on the consequences of work accidents

Mind the gap, please!

The effect of temporary help agencies on the consequences of work accidents

(Referencia completa: García-Serrano, C.; Hernanz, V. y Toharia, L. (2010), “Mind the gap, please! The effect of temporary help agencies on the consequences of work accidents”, Journal of Labor Research, 31(2), págs. 162-182)

The extensive use of temporary work has raised concerns about its economic consequences, in particular its effects on job quality and working conditions. One of these dimensions refers to work accidents. Aggregate indicators suggest that some relationship might exist between the use of temporary contracts and the incidence of work accidents; in countries where the proportion of temporary employment is high, the rates of work accidents also tend to be high. However, the issue in this paper is whether within a country temporary workers tend to show higher rates of work accidents than their permanent counterparts and whether the consequences are worse. Furthermore, given the increasing significance of flexible employment and the share of Temporary Help Agencies (THAs) in labour market intermediation in many countries, another feature (which is relevant from a policy perspective) is whether workers employed through THAs are more likely to suffer work-related accidents whose consequences are also worse.

Empirical studies on work accidents usually focus their attention on the incidence of accidents. In general, the available evidence suggests that temporary employment, although correlated on average with higher accident rates, is not so significant when personal and job characteristics are taken into account (see Hernanz and Toharia, 2006, for a thorough review of the literature). However, no evidence exists on the potentially differential effects of diverging forms of temporary employment, distinguishing between workers hired through THAs and workers holding ‘direct’ temporary contracts, due to the lack of appropriate data. At the same time, although there is a growing body of literature which investigates the screening and training of temporary agency workers and the relative success of these workers in their transition to permanent jobs, no previous studies have attempted to analyse the impact of this type of flexible employment on the consequences of work-related accidents. This paper aims to fill these gaps in part.

The contribution of this paper lies in three areas. First, it analyses the relationship between the types of contracts held by workers and some consequences of work accidents. In particular, it examines whether the accidents are similar (with respect to their characteristics and consequences) when faced by distinct groups of workers classified according to their contract types. Moreover, it investigates to what extent the consequences of work accidents (in terms of the degree of injury and the duration of absence) vary among permanent workers, workers with fixed-term contracts and workers employed through THAs. This makes it possible to investigate whether the type of contract has a genuine effect on the consequences of work accidents, once working conditions and other variables are controlled for.

Second, the data set used in the empirical analysis, a Spanish administrative register containing all the work accidents that occurred during a whole year and their characteristics, contains a wide set of variables, making it possible to take into account personal characteristics, job attributes and accident-related characteristics which may potentially influence their consequences.

Third, the analysis focuses attention on two dimensions of the consequences of work accidents: the degree of injury and the duration of absence. This allows us to examine whether there are differences in both dimensions across workers grouped according to their contracts: for instance, whether temporary agency workers suffer less severe accidents and experience shorter absences compared to their temporary and permanent counterparts. These issues cannot be typically analysed using survey data.

The administrative data set (a register containing all the work accidents occurring during a whole year for the period 2004-2007) presents an important drawback though: it contains exclusively data on workers that did experience an accident, not data on all workers potentially at risk of having an accident. The problem is that the sample is highly selected, so that we can estimate the probability of a severe/fatal accident and the duration of absence conditional on an accident having occurred. In order to deal with this issue, we develop two strategies. The first one consists of using an even more selected sample, in line with the estimation strategy proposed by Levitt and Porter (2001) in the context of the study of seat belt and air bag effectiveness. The second one implies the use of econometric models that allow the estimation of the impact of the regressors when the researcher does not have information on part of the population under study.

Our results are as follows. The initial numbers indicate that the consequences of work-related accidents vary with contract types but also that contract type is one of the determinants of the risk and consequences of accidents. Thus, although THA-hired workers who suffer work-related accidents are less likely to be seriously injured or die and are more likely to have a short absence after the accident, these workers are over-represented in extremely short tenures, in low-skilled and unskilled occupations and in sectors with high risk of accidents. At the same time, they are over-represented in medium-sized establishments but under-represented in the largest ones, which could indicate that having a prevention system on their own reduces the likelihood that temporary agency workers suffer an accident in comparison with other workers.

After providing these basic descriptives, we have carried out a more rigorous multivariate analysis in order to determine the influence of contract types on the probability of suffering a serious/fatal accident and on the number of working days lost, once a set of observable personal, job and accident characteristics are controlled for. The estimate results show that workers employed through THAs exhibit a statistically significant lower probability of suffering a serious/fatal accident and lower duration of an absence after a work-related accident has happened compared to workers holding either direct temporary contracts or open-ended contracts and whose working conditions and personal characteristics are the same. These findings are robust to the use of different samples and estimation methods to cope with the problem that the data set we use contains exclusively data on workers that did experience an accident.

These results might be interpreted as an indication that, although the short duration of their assignments may be a potential factor increasing the probability of suffering an accident and the consequences of it, temporary agency workers potentially benefit from specific training (safety and health programmes) provided by THAs in order to avoid work accidents.

Given the significance of temporary employment and the share of THAs in labour market intermediation in Spain, the analysis we perform and the results we obtain are relevant from an academic and also a policy perspective. Knowing whether temporary agency workers have fewer accidents than their temporary counterparts and whether their consequences are less serious constitutes relevant issues at the heart of the current debate on the role of THAs.  As a matter of fact, the temporary agency industry has been demanding the Government more significance in the latest labour reform: they asked for the broadening of their market, the reduction of the costs they face and the entry into the training sector. However, their undaunted, unanimous petition was the abolition of the bans on THAs working in the so-called risky sectors. This paper has offered one reason for recognising agency work as a valid form of employment in its own right, albeit one that is substantially different from the standard employment relationship.