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Flexibility Versus Hiring Costs: The Demand for Part-time Labor

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Author Info

  • Muriel Roger
  • Sebastien Roux

    ()

Abstract

For the last decade, part-time studies have mainly focused on supply side effects. We focus in this paper on the demand side effects. On the one hand, to be more flexible, firms hire part-time workers so that production is always as close as possible to the demand. On the other hand, to decrease their hiring costs, firms prefer to hire full-time workers. We introduce these part-time work characteristics within an on-the-job equilibrium search model framework. The firm's wage choices are the result of a trade-off between its production level (which depend on his size), its wage costs and the costs of hiring part- and full-time employees. Workers receive two kinds of labor contracts: one corresponding to full-time jobs, and the other one to part-time jobs. Utility as a function of wages and the number of weekly worked hours is the criteria workers consider when accepting or rejecting job offers. In this paper, we prove the existence of a Nash equilibrium, in which all firms hire both part- and full-time workers. We can thus compare different equilibria related with different full-time work week. The share of part-time workers depends on which of two economic effects is dominant: relative wage costs in one case, and production reorganization effects in the other case.

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File URL: http://www.inra.fr/Internet/Departements/ESR/UR/lea/documents/wp/wp0101.pdf
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Bibliographic Info

Paper provided by Laboratoire d'Economie Appliquee, INRA in its series Research Unit Working Papers with number 0101.

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Length: 42 pages
Date of creation: Dec 2000
Date of revision:
Handle: RePEc:lea:leawpi:0101

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Related research

Keywords: Labor Market Frictions; Equilibrium Search; Part-Time Work;

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Cited by:
  1. Juan R. Cuadrado Roura & Carlos Iglesias Fernández & Raquel Llorente Heras, 2007. "Regional differences in women´s part time employment. An analysis of supply and demand," Working Papers 03/07, Instituto Universitario de Análisis Económico y Social.

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