Flex Work Research Centre

Identifying Regional and Sectoral Dynamics of the Dutch Staffing Labour Cycle

This study analyses the dynamic characteristics of staffing employment across different business sectors and across different geographical regions in the Netherlands. We analyse a micro data set of the marketleader of the Dutch staffing employment market, i.e. Randstad. We apply the dynamic factor model to extract common information out of a large data set and to isolate business cycle frequencies with the aim of forecasting economic activity. We identify regions and sectors
whose cyclical developments lead the staffing labour cycle at the coun try level. The second question is then which model specification can best exploit the identified leading indicators at the disaggregate level to forecast the country aggregate? The dynamic factor model turns out to outperform univariate benchmark forecasting models by exploiting the substantial temporal variation of the staffing labour market at the disaggregate level.