> BY: JOSEPH M. MILNER
> Washington University
> EDIEAL J. PINKER
> University of Rochester
>Paper ID: University of Rochester Simon School WP CIS 97-07
> Date: 1997
> Contact: EDIEAL J. PINKER
> Email: Mailto:pinker at ssb.rochester.edu
> Postal: University of Rochester
> Simon School of Business
> Carol Simon Hall
> Rochester, NY 14627 USA
> Phone: (716)275-2131
> Fax: (716)273-1140
> Co-Auth: JOSEPH M. MILNER
> Email: Mailto:milner at wuolin.wustl.edu
> Postal: Washington University
> Campus Box 1133
> One Brookings Drive
> St. Louis, MO 63130 USA
>Paper Requests:
> Please send a message to Mailto:mcwilliams at ssb.rochester.edu Or
> write to the Office of Public Affairs/Working Papers Office,
> William E. Simon Graduate School of Business Administration,
> University of Rochester, 2-352 Carol G. Simon Hall, Rochester,
> NY 14627. Phone:(716) 275-8378. Fax:(716) 275-9331.
>ABSTRACT:
> Temporary help agencies are among the largest employers of
> American workers today. Depending upon the interpretation, the
> Bureau of Labor Statistics counts between 3 and 30 million
> Americans in contingent and part-time work arrangements. We
> model firms' use of contingent labor in maximizing profits when
> facing both uncertain labor demand and supply. We show that
> firms should rely on both full-time and contingent labor and
> that such contingent labor may be provided by internal pools of
> flexible workers or by external labor supply agencies. In
> particular, we consider contracts which firms establish with
> labor supply agencies to provide contingent labor as well as the
> process such agencies follow when supplying labor. We show that
> such contracts can be beneficial to both firms and agencies.
> Numerical experiments demonstrate that firms should increasingly
> rely on external labor sources as labor availability increases
> and that they should increasingly rely on formal contracts for
> contingent labor as the added value of labor increases. We
> validate our results with evidence of the actual behavior of
> firms across a wide range of industries.