Isolating the Determinants of Temporary Agency Worker Use by Firms An Analysis of Temporary Agency Workers in Australian Aged Care

Abstract

Despite a reasonable amount of literature on firms’ reasons for using agency workers we contend that the firms which are users of agency workers are not well understood. Temporary agency work is interesting in the context of understanding the functioning of labour markets. Temporary agency work is of particular interest in Australia which already has a high level of casual employment offering employers considerable flexibility in managing their workforce by other means. We use a unique Australian employer survey in an industry with a higher than usual share of agency workers in the constrained worker supply context, to highlight and explore the differentiating features between those firms that do and do not use agency workers. The analysis enables better identification of the economic conditions under which firms use agency workers. We gain insight into aspects of the aged care sector that encourage temporary agency worker usage by firms.