Training provision and regulation: an analysis of the temporary help industry

This paper studies the juridical rationale for mandatory training provision on Temporary Help Agencies as established in the Spanish Temporary Help Agencies Act, 1994 (Law 14/94). No positive relationship is found between the improvement in Temporary Help Agencies' added value levels and their investments in temps' training. In analyzing this specific provision of Spanish Labor Law we adopt a positive focus to explain its impact on the functioning of the temporary help industry. The application of institutional theory leads us to conclude that efficient use of this legal prescription is limited. The issue is relevant to understanding the economic outcomes of regulation from a law and economics perspective.