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‘Atypical Work’ and Compensation

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Author Info

  • John T. Addison

    (University of South Carolina (U.S.A.), GEMF/Universidade de Coimbra (Portugal) and IZA (Germany))

  • Christopher J. Surfield

    (Department of Business Administration, Lander University)

Abstract

Atypical work, or alternative work arrangements in U.S. parlance, has long been criticized in popular debate as providing poorly-compensated employment. Although the early U.S. literature seemed to confirm this perception, more recent cet. par. analysis has offered a partial but somewhat more optimistic evaluation. The present paper builds on the latter body of research with a view to providing improved estimates of the effect of the full range alternative work arrangements on worker compensation. The improvements are basically two-fold. First, we account for the skewness in atypical worker earnings while retaining the Mincerian human capital earnings function. Second, we deploy additional waves of the main dataset on atypical workers (the CAEAS), while supplementing this cross-section analysis with longitudinal data from the NLSY. Our analysis covers earnings and (access to) health benefits. We report that although one group of atypical workers (contractors) seems to enjoy a wage premium, cross-section results from the CPS and NLSY for the better-known category of temporary workers point to a negative wage differential of some 6-15 percent. It emerges that much of the disparity stems from unobserved worker heterogeneity, accounting for which still supports a wage advantage for contracting work. As far as fringes are concerned, the appearance in cross section of a potentially large deficit in access to health benefits is again reduced after accounting for the permanent unobserved individual heterogeneity, although in this case the attenuation is much more modest.

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Bibliographic Info

Paper provided by GEMF - Faculdade de Economia, Universidade de Coimbra in its series GEMF Working Papers with number 2005-14.

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Length: 56 pages
Date of creation: 2005
Date of revision:
Publication status: Published in Southern Economic Journal, 73(4), April 2007
Handle: RePEc:gmf:wpaper:2005-14

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Keywords: atypical/contingent work; alternative work arrangements; wage differentials; employer-related health insurance;

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References

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  1. David H. Autor, 2003. "Outsourcing at Will: The Contribution of Unjust Dismissal Doctrine to the Growth of Employment Outsourcing," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 21(1), pages 1-42, January.
  2. Addison, John T. & Surfield, Christopher J., 2004. "The Use of Alternative Work Arrangements by the Jobless: Evidence from the CAEAS/CPS," IZA Discussion Papers 1378, Institute for the Study of Labor (IZA).
  3. Lewis Segal & Daniel Sullivan, 1996. "The growth of temporary services work," Working Paper Series, Macroeconomic Issues, Federal Reserve Bank of Chicago WP-96-26, Federal Reserve Bank of Chicago.
  4. Marco Manacorda, 2004. "Can the Scala Mobile Explain the Fall and Rise of Earnings Inequality in Italy? A Semiparametric Analysis, 19771993," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 22(3), pages 585-614, July.
  5. Blackburn, McKinley L., 2007. "Estimating wage differentials without logarithms," Labour Economics, Elsevier, Elsevier, vol. 14(1), pages 73-98, January.
  6. Heinrich, Carolyn J. & Mueser, Peter R. & Troske, Kenneth, 2002. "Welfare to Temporary Work: Implications for Labor Market Outcomes," IZA Discussion Papers 584, Institute for the Study of Labor (IZA).
  7. Susan N. Houseman & Arne L. Kalleberg & George A. Erickcek, 2003. "The role of temporary agency employment in tight labor markets," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 57(1), pages 105-127, October.
  8. Abraham, Katharine G & Taylor, Susan K, 1996. "Firms' Use of Outside Contractors: Theory and Evidence," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 14(3), pages 394-424, July.
  9. Hirsch, Barry, 2004. "Why Do Part-Time Workers Earn Less? The Role of Worker and Job Skills," IZA Discussion Papers 1261, Institute for the Study of Labor (IZA).
  10. Henry S. Farber, 1999. "Alternative and Part-Time Employment Arrangements as a Response to Job Loss," NBER Working Papers 7002, National Bureau of Economic Research, Inc.
  11. David H. Autor, 2001. "Why Do Temporary Help Firms Provide Free General Skills Training?," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 116(4), pages 1409-1448, November.
  12. Farber, Henry S, 1999. "Alternative and Part-Time Employment Arrangements as a Response to Job Loss," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 17(4), pages S142-69, October.
  13. Booth, Alison L. & Francesconi, Marco & Frank, Jeff, 2000. "Temporary Jobs: Stepping Stones or Dead Ends?," IZA Discussion Papers 205, Institute for the Study of Labor (IZA).
  14. Susan N. Houseman & Arne L. Kalleberg & George A. Erickcek, . "The Role of Temporary Agency Employment in Tight Labor Markets," Upjohn Working Papers and Journal Articles, W.E. Upjohn Institute for Employment Research snhakge2003, W.E. Upjohn Institute for Employment Research.
  15. Chris Forde & Gary Slater, 2004. "Agency working in Britain: character, consequences and regulation," Working Papers, Nottingham Trent University, Nottingham Business School, Economics Division 2004/4, Nottingham Trent University, Nottingham Business School, Economics Division.
  16. Hirsch, Barry & Schumacher, Edward J., 2003. "Match Bias in Wage Gap Estimates Due to Earnings Imputation," IZA Discussion Papers 783, Institute for the Study of Labor (IZA).
  17. Susan N. Houseman & Anne E. Polivka, 1999. "The Implications of Flexible Staffing Arrangements for Job Stability," Upjohn Working Papers and Journal Articles, W.E. Upjohn Institute for Employment Research 99-56, W.E. Upjohn Institute for Employment Research.
  18. Lewis M. Segal & Daniel G. Sullivan, 1998. "Wage differentials for temporary services work: evidence from administrative data," Working Paper Series, Federal Reserve Bank of Chicago WP-98-23, Federal Reserve Bank of Chicago.
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Citations

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Cited by:
  1. Blandina Oliveira & Adelino Fortunato, 2008. "The dynamics of the growth of firms: evidence from the services sector," Empirica, Springer, Springer, vol. 35(3), pages 293-312, July.
  2. Karabchuk, Tatiana, 2012. "Part-time and temporary workers in Russia: winners or losers?," Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 45(1), pages 23-39.
  3. Adelino Fortunato & Daniel Murta, 2005. "Horizontal Differentiation and the survival of Train and Coach modes in medium range passenger transport, a welfare analysis comprising economies of scope and scale," GEMF Working Papers, GEMF - Faculdade de Economia, Universidade de Coimbra 2005-15, GEMF - Faculdade de Economia, Universidade de Coimbra.
  4. Marloes de Graaf-Zijl, 2005. "Compensation of On-call and Fixed-term Employment: the Role of Uncertainty," Tinbergen Institute Discussion Papers, Tinbergen Institute 05-120/3, Tinbergen Institute.
  5. Marloes de Graaf-Zijl, 2005. "The Attractiveness of Temporary Employment to Reduce Adjustment Costs," Tinbergen Institute Discussion Papers, Tinbergen Institute 05-121/3, Tinbergen Institute.
  6. Marloes de Graaf-Zijl, 2005. "The Anatomy of Job Satisfaction and the Role of Contingent Employment Contracts," Tinbergen Institute Discussion Papers, Tinbergen Institute 05-119/3, Tinbergen Institute.

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