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Zero-hours Contracts in a Frictional Labour Market

Author

Listed:
  • Juan J. Dolado
  • Etienne Lale
  • Helene Turone

Abstract

We propose a model to evaluate the U.K.'s zero-hours contract (ZHC)- a contract that exempts employers from the requirement to provide any minimum working hours, and allows workers to decline any workload. We find quantitatively mixed welfare effects of ZHCs. On one hand they unlock job creation among firms that face highly volatile business conditions and increase laborforce participation of individuals who prefer flexible work schedules. On the other hand, the use ofZHCs by less volatile firms, where jobs are otherwise viable under regular contracts, reduces welfare and likely explains negative employee reactions to this contract.

Suggested Citation

  • Juan J. Dolado & Etienne Lale & Helene Turone, 2022. "Zero-hours Contracts in a Frictional Labour Market," Bristol Economics Discussion Papers 22/763, School of Economics, University of Bristol, UK.
    • Handle: RePEc:bri:uobdis:22/763
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    Cited by:

    1. Pauline Carry, 2022. "The Effects of the Legal Minimum Working Time on Workers, Firms and the Labor Market," Working Papers hal-04067393, HAL.
    2. Pauline Carry, 2022. "The Effects of the Legal Minimum Working Time on Workers, Firms and the Labor Market," SciencePo Working papers Main hal-04067393, HAL.
    3. Garcia-Louzao, Jose & Hospido, Laura & Ruggieri, Alessandro, 2023. "Dual returns to experience," Labour Economics, Elsevier, vol. 80(C).

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    More about this item

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • L84 - Industrial Organization - - Industry Studies: Services - - - Personal, Professional, and Business Services

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