"Using French administrative data we estimate the wage gap distribution between
in-house and temporary agency workers working in the same establishment and the same
occupation. The average wage gap is about 3%, but the gap is negative in more than
25% of establishment × occupation cells. We develop and estimate a search and matching
model which shows that while the wage gap is largely inefficient, eliminating it reduces
efficiency, as it also arises from objective factors that contribute to the efficient allocation
of jobs."

Support: Digital