Labor market intermediaries make the world smaller

Abstract

This paper uses network analysis to study how employment intermediaries have influenced inter-firm worker mobility in a region of Italy, in response to a 1997 reform that introduced temporary employment agencies. Worker reallocations from a matched employer-employee dataset are mapped onto a directed graph where the vertices are firms and the links denote transfers of workers between firms. Temporary employment agencies significantly improve network integration and practicability, while rapidly increasing the control over mobility channels. The trade off inherent in intermediation activity is captured and discussed. The potential of network analysis as a tool for monitoring regional labor markets is highlighted.