IDEAS home Printed from https://ideas.repec.org/p/cpr/ceprdp/16843.html
   My bibliography  Save this paper

Zero-hours Contracts in a Frictional Labor Market

Author

Listed:
  • Dolado, Juan J
  • Lalé, Etienne
  • Turon, Hélène

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 employees to decline any workload. We find quantitatively that ZHCs improve welfare by enabling firms with more volatile business conditions to create additional jobs. While weaker than job creation, substitution effects – some jobs that are otherwise viable under regular contracts are advertised as ZHCs – are sizable and likely explain negative reactions against ZHCs. Our model also assesses increased labor-force participation from ZHCs which appeal to individuals who prefer flexible work schedules.

Suggested Citation

  • Dolado, Juan J & Lalé, Etienne & Turon, Hélène, 2021. "Zero-hours Contracts in a Frictional Labor Market," CEPR Discussion Papers 16843, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:16843
    as

    Download full text from publisher

    File URL: https://cepr.org/publications/DP16843
    Download Restriction: CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. John Ameriks & Joseph Briggs & Andrew Caplin & Minjoon Lee & Matthew D. Shapiro & Christopher Tonetti, 2020. "Older Americans Would Work Longer If Jobs Were Flexible," American Economic Journal: Macroeconomics, American Economic Association, vol. 12(1), pages 174-209, January.
    2. Daniel Borowczyk-Martins & Grégory Jolivet & Fabien Postel-Vinay, 2013. "Accounting for Endogeneity in Matching Function Estimation," SciencePo Working papers hal-03473875, HAL.
    3. Katharine G. Abraham & John Haltiwanger & Kristin Sandusky & James Spletzer, 2019. "The Rise of the Gig Economy: Fact or Fiction?," AEA Papers and Proceedings, American Economic Association, vol. 109, pages 357-361, May.
    4. repec:hal:spmain:info:hdl:2441/4l136f59vb8mcalu5p6p5li007 is not listed on IDEAS
    5. Rui Costa & Stephen Machin, 2019. "The labour market," CEP Election Analysis Papers 046, Centre for Economic Performance, LSE.
    6. Nicholas Bloom & James Liang & John Roberts & Zhichun Jenny Ying, 2015. "Does Working from Home Work? Evidence from a Chinese Experiment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 130(1), pages 165-218.
    7. Moritz Kuhn & Iourii Manovskii & Xincheng Qiu, 2021. "The Geography of Job Creation and Job Destruction," NBER Working Papers 29399, National Bureau of Economic Research, Inc.
    8. Michael W. L. Elsby & Ryan Michaels, 2013. "Marginal Jobs, Heterogeneous Firms, and Unemployment Flows," American Economic Journal: Macroeconomics, American Economic Association, vol. 5(1), pages 1-48, January.
    9. Daniel Borowczyk-Martins & Gregory Jolivet & Fabien Postel-Vinay, 2013. "Accounting For Endogeneity in Matching Function Estimation," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 16(3), pages 440-451, July.
    10. Alexandre Mas & Amanda Pallais, 2017. "Valuing Alternative Work Arrangements," American Economic Review, American Economic Association, vol. 107(12), pages 3722-3759, December.
    11. Arindrajit Dube & Jeff Jacobs & Suresh Naidu & Siddharth Suri, 2020. "Monopsony in Online Labor Markets," American Economic Review: Insights, American Economic Association, vol. 2(1), pages 33-46, March.
    12. Nikhil Datta & Giulia Giupponi & Stephen Machin, 2019. "Zero-hours contracts and labour market policy," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 34(99), pages 369-427.
    13. Patterson, Christina & Şahin, Ayşegül & Topa, Giorgio & Violante, Giovanni L., 2016. "Working hard in the wrong place: A mismatch-based explanation to the UK productivity puzzle," European Economic Review, Elsevier, vol. 84(C), pages 42-56.
    14. Alexandre Mas & Amanda Pallais, 2020. "Alternative Work Arrangements," Annual Review of Economics, Annual Reviews, vol. 12(1), pages 631-658, August.
    15. Abi Adams & Judith Freedman & Jeremias Prassl, 2018. "Rethinking legal taxonomies for the gig economy," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 34(3), pages 475-494.
    16. Marta Angelici & Paola Profeta, 2020. "Smart-working: Work Flexibility Without Constraints," CHILD Working Papers Series 77 JEL Classification: J1, Centre for Household, Income, Labour and Demographic Economics (CHILD) - CCA.
    17. Tito Boeri & Giulia Giupponi & Alan B. Krueger & Stephen Machin, 2020. "Solo Self-Employment and Alternative Work Arrangements: A Cross-Country Perspective on the Changing Composition of Jobs," Journal of Economic Perspectives, American Economic Association, vol. 34(1), pages 170-195, Winter.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

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

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Adams-Prassl, Abi & Balgova, Maria & Qian, Matthias, 2020. "Flexible Work Arrangements in Low Wage Jobs: Evidence from Job Vacancy Data," IZA Discussion Papers 13691, Institute of Labor Economics (IZA).
    2. Mueller-Langer, Frank & Gómez-Herrera, Estrella, 2022. "Mobility restrictions and the substitution between on-site and remote work: Empirical evidence from a European online labour market," Information Economics and Policy, Elsevier, vol. 58(C).
    3. Vij, Akshay & Souza, Flavio F. & Barrie, Helen & Anilan, V. & Sarmiento, Sergio & Washington, Lynette, 2023. "Employee preferences for working from home in Australia," Journal of Economic Behavior & Organization, Elsevier, vol. 214(C), pages 782-800.
    4. Abrardi Laura & Grinza Elena & Manello Alessandro & Porta Flavio, 2022. "Work From Home Arrangements and Organizational Performance in Italian SMEs: Evidence from the COVID-19 Pandemic," Working papers 076, Department of Economics, Social Studies, Applied Mathematics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino.
    5. Adams-Prassl, Abi & Boneva, Teodora & Golin, Marta & Rauh, Christopher, 2022. "Work that can be done from home: evidence on variation within and across occupations and industries," Labour Economics, Elsevier, vol. 74(C).
    6. Michele Mariani & Livia Ristuccia & Pasqualino Montanaro, 2023. "Propensity to work remotely in the Bank of Italy: a behavioural analysis," Questioni di Economia e Finanza (Occasional Papers) 753, Bank of Italy, Economic Research and International Relations Area.
    7. Squicciarini, Mara & Juhász, Réka & Voigtländer, Nico, 2020. "Away from Home and Back: Coordinating (Remote) Workers in 1800 and 2020," CEPR Discussion Papers 15578, C.E.P.R. Discussion Papers.
    8. Sabrina Wulff Pabilonia & Victoria Vernon, 2022. "Telework, Wages, and Time Use in the United States," Review of Economics of the Household, Springer, vol. 20(3), pages 687-734, September.
    9. Adams-Prassl, Abigail & Balgova, Maria & Qian, Matthias, 2020. "Flexible Work Arrangements in Low Wage Jobs: Evidence from Job Vacancy Data," CEPR Discussion Papers 15263, C.E.P.R. Discussion Papers.
    10. Datta, Nikhil, 2019. "Willing to pay for security: a discrete choice experiment to analyse labour supply preferences," LSE Research Online Documents on Economics 103390, London School of Economics and Political Science, LSE Library.
    11. Barrero, Jose Maria & Bloom, Nick & Davis, Steven J., 2020. "Why Working From Home Will Stick," SocArXiv wfdbe, Center for Open Science.
    12. Shao, Lin & Sohail, Faisal & Yurdagul, Emircan, 2023. "Are working hours complements in production?," Journal of Economic Dynamics and Control, Elsevier, vol. 153(C).
    13. Behrens, Kristian & Kichko, Sergei & Thisse, Jacques-Francois, 2024. "Working from home: Too much of a good thing?," Regional Science and Urban Economics, Elsevier, vol. 105(C).
    14. Essbaumer, Elisabeth, 2022. "Home Office is here to stay? Access to Home Office and Remote Work Potentials across Swiss Industries," Economics Working Paper Series 2213, University of St. Gallen, School of Economics and Political Science.
    15. Olena Kostyshyna & Etienne Lalé, 2022. "On the evolution of multiple jobholding in Canada," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 55(2), pages 1095-1134, May.
    16. Adams-Prassl, Abi & Boneva, Teodora & Golin, Marta & Rauh, Christopher, 2023. "The value of sick pay," European Economic Review, Elsevier, vol. 151(C).
    17. di Porto, Edoardo & Garibaldi, Pietro & Mastrobuoni, Giovanni & Naticchioni, Paolo, 2022. "The Perverse Effect of Flexible Work Arrangements on Informality," IZA Discussion Papers 15794, Institute of Labor Economics (IZA).
    18. Marie Boltz & Bart Cockx & Ana Maria Diaz & Luz Magdalena Salas, 2023. "How does working‐time flexibility affect workers' productivity in a routine job? Evidence from a field experiment," British Journal of Industrial Relations, London School of Economics, vol. 61(1), pages 159-187, March.
    19. Alipour, Jean-Victor & Falck, Oliver & Schüller, Simone, 2023. "Germany’s capacity to work from home," European Economic Review, Elsevier, vol. 151(C).
    20. Ganserer, Angelika & Gregory, Terry & Zierahn, Ulrich, 2022. "Minimum Wages and the Rise in Solo Self-Employment," IZA Discussion Papers 15283, Institute of Labor Economics (IZA).

    More about this item

    Keywords

    Zero-hours contracts; Working hours; Gig economy; Flexibility;
    All these keywords.

    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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:16843. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://www.cepr.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.