This study analyses whether temporary work agency (TWA) employment is a stepping stone to better labour market outcomes for displaced workers. Using monthly Dutch administrative data for the period 2010-2022, we focus on a sample of incumbent employees who are displaced because of a firm bankruptcy, and analyse the causal effect of the first job after displacement being a TWA job vs. another job. The main contribution of this study is that we exploit variation in firm bankruptcy dates in a novel instrumental variable approach to deal with the endogeneity of TWA employment. We find that TWA causes negative effects on employment and working hours, which dissipate around 30 months after firm bankruptcy. Effects on hourly wages are negative (20\%) and consistent up until seven years after firm bankruptcy. TWA employment also reduces the probability of having a permanent contract by around 20 percentage points in the long run.