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The impact of short-term employment contracts on employment volatility and economic fluctuations

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  • Matsue, Toyoki

Abstract

This study investigates the effects of short-term employment contracts on employment fluctuations and economic fluctuations using a dynamic model with long-term and short-term employment contracts. Numerical experiments show that an increase in the short-term employment ratio amplifies the fluctuations in total employment—when an expected temporary productivity shock occurs—because of the variations in short-term employment being larger than those in long-term employment. Moreover, the large fluctuations in employment lead to the high variations in production and consumption. Promoting the utilization of short-term employment contracts would elicit the amplification of not only the employment fluctuations but also the economic fluctuations.

Suggested Citation

  • Matsue, Toyoki, 2020. "The impact of short-term employment contracts on employment volatility and economic fluctuations," MPRA Paper 102731, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:102731
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    employment fluctuations; short-term employment; labor contract; employment duration; labor market institutions;
    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
    • E27 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Forecasting and Simulation: Models and Applications
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts

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