This paper analyzes from an economic viewpoint the legal rationality of imposing training requirements on Temporary Staff Agencies for their workers assigned under Law14/94. A positive focus is adopted with the aim of finding economic causes in the adoption of this norm and of explaining its effect on the functioning of the labour intermediation sector. Our analysis, based on the application of the non-market failure literature, leads us to conclude that an efficient use of this legal prescription is limited due to some of its deficiencies. Moreover, no positive relationship is found between Temporary Staff Agency productivity and their investment in training of assigned workers. Evidence is provided from data collected from official registers in the Business Register and a survey sent to a sample of Spanish Temporary Staff Agencies.

Key words: temporary staff agencies, training, non-market failure theory, productivity, Law 14/94.
JEL classification: K31, L51.