IDEAS home Printed from https://ideas.repec.org/a/oup/ecpoli/v34y2019i99p369-427..html
   My bibliography  Save this article

Zero-hours contracts and labour market policy

Author

Listed:
  • Nikhil Datta
  • Giulia Giupponi
  • Stephen Machin

Abstract

SUMMARYThe evolving nature of atypical work arrangements is studied. A particular focus is placed on one such form of work relation: zero-hours contracts (ZHCs). The paper uses existing secondary data and new survey data collected for the specific purpose of studying alternative work arrangements to describe the nature of ZHC work in the UK labour market. The interaction with labour market policy is explored, in the context of the 2016 introduction of the UK's National Living Wage. ZHC work is shown to be an important feature of today's work arrangements, and the wage cost shock induced by the new, higher minimum wage resulted in an increased use of ZHCs in the UK social care sector, and in low wage sectors more generally.

Suggested Citation

  • 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.
    • Handle: RePEc:oup:ecpoli:v:34:y:2019:i:99:p:369-427.
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1093/epolic/eiz008
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    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. Brian Bell & Stephen Machin, 2018. "Minimum Wages and Firm Value," Journal of Labor Economics, University of Chicago Press, vol. 36(1), pages 159-195.
    2. Card, David & Krueger, Alan B, 1994. "Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania," American Economic Review, American Economic Association, vol. 84(4), pages 772-793, September.
    3. Werner Eichhorst & Verena Tobsch, 2013. "Has Atypical Work Become Typical in Germany?: Country Case Studies on Labour Market Segmentation," SOEPpapers on Multidisciplinary Panel Data Research 596, DIW Berlin, The German Socio-Economic Panel (SOEP).
    4. Mark B. Stewart, 2012. "Wage inequality, minimum wage effects, and spillovers," Oxford Economic Papers, Oxford University Press, vol. 64(4), pages 616-634, October.
    5. Claus Thustrup Kreiner & Daniel Reck & Peer Ebbesen Skov, 2020. "Do Lower Minimum Wages for Young Workers Raise Their Employment? Evidence from a Danish Discontinuity," The Review of Economics and Statistics, MIT Press, vol. 102(2), pages 339-354, May.
    6. repec:ilo:ilowps:481496 is not listed on IDEAS
    7. Machin, Stephen & Manning, Alan & Rahman, Lupin, 2002. "Where the minimum wage bites hard: the introduction of the UK national minimum wage to a low wage sector," LSE Research Online Documents on Economics 20070, London School of Economics and Political Science, LSE Library.
    8. John T. Addison & Christopher J. Surfield, 2008. "Atypical Work and Employment Continuity," Working Paper series 12_08, Rimini Centre for Economic Analysis, revised Jan 2008.
    9. Alexandre Mas & Amanda Pallais, 2017. "Valuing Alternative Work Arrangements," American Economic Review, American Economic Association, vol. 107(12), pages 3722-3759, December.
    10. Clemens, Jeffrey & Wither, Michael, 2019. "The minimum wage and the Great Recession: Evidence of effects on the employment and income trajectories of low-skilled workers," Journal of Public Economics, Elsevier, vol. 170(C), pages 53-67.
    11. Mark B. Stewart, 2004. "The Impact of the Introduction of the U.K. Minimum Wage on the Employment Probabilities of Low-Wage Workers," Journal of the European Economic Association, MIT Press, vol. 2(1), pages 67-97, March.
    12. Abraham Katharine G. & Amaya Ashley, 2019. "Probing for Informal Work Activity," Journal of Official Statistics, Sciendo, vol. 35(3), pages 487-508, September.
    13. Richard Dickens & Alan Manning & Tim Butcher, 2012. "Minimum Wages and Wage Inequality: Some Theory and an Application to the UK," Working Paper Series 4512, Department of Economics, University of Sussex Business School.
    14. David H. Autor & Alan Manning & Christopher L. Smith, 2016. "The Contribution of the Minimum Wage to US Wage Inequality over Three Decades: A Reassessment," American Economic Journal: Applied Economics, American Economic Association, vol. 8(1), pages 58-99, January.
    15. Lawrence F. Katz & Alan B. Krueger, 2016. "The Rise and Nature of Alternative Work Arrangements in the United States, 1995-2015," NBER Working Papers 22667, National Bureau of Economic Research, Inc.
    16. Machin, Stephen & Giupponi, Giulia, 2018. "Changing the Structure of Minimum Wages: Firm Adjustment and Wage Spillovers," CEPR Discussion Papers 12919, C.E.P.R. Discussion Papers.
    17. Gielen, Anne C. & Schils, Trudie, 2014. "Non-Standard Employment Patterns in the Netherlands," IZA Policy Papers 77, Institute of Labor Economics (IZA).
    18. David S. Lee, 1999. "Wage Inequality in the United States During the 1980s: Rising Dispersion or Falling Minimum Wage?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(3), pages 977-1023.
    19. McCrate, Elaine., 2018. "Unstable and on-call work schedules in the United States and Canada," ILO Working Papers 994978592602676, International Labour Organization.
    20. Stephen Machin & Joan Wilson, 2004. "Minimum wages in a low-wage labour market: Care homes in the UK," Economic Journal, Royal Economic Society, vol. 114(494), pages 102-109, March.
    21. Arindrajit Dube & T. William Lester & Michael Reich, 2010. "Minimum Wage Effects Across State Borders: Estimates Using Contiguous Counties," The Review of Economics and Statistics, MIT Press, vol. 92(4), pages 945-964, November.
    22. Arindrajit Dube & T. William Lester & Michael Reich, 2016. "Minimum Wage Shocks, Employment Flows, and Labor Market Frictions," Journal of Labor Economics, University of Chicago Press, vol. 34(3), pages 663-704.
    23. 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.
    24. Lawrence F. Katz & Alan B. Krueger, 2017. "The Role of Unemployment in the Rise in Alternative Work Arrangements," American Economic Review, American Economic Association, vol. 107(5), pages 388-392, May.
    25. Daniel Aaronson, 2001. "Price Pass-Through And The Minimum Wage," The Review of Economics and Statistics, MIT Press, vol. 83(1), pages 158-169, February.
    26. Eichhorst, Werner & Tobsch, Verena, 2013. "Has Atypical Work Become Typical in Germany?," IZA Discussion Papers 7609, Institute of Labor Economics (IZA).
    27. Lawrence F. Katz & Alan B. Krueger, 2019. "Understanding Trends in Alternative Work Arrangements in the United States," NBER Working Papers 25425, National Bureau of Economic Research, Inc.
    28. 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.
    29. Stephen Machin & Alan Manning & Lupin Rahman, 2003. "Where the Minimum Wage Bites Hard: Introduction of Minimum Wages to a Low Wage Sector," Journal of the European Economic Association, MIT Press, vol. 1(1), pages 154-180, March.
    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. 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).
    2. Elodie Andrieu & Malgorzata Kuczera, 2023. "Minimum Wage and Skills -Evidence from Job Vacancy Data," Working Papers 034, The Productivity Institute.
    3. Haapanala, Henri & Marx, Ive & Parolin, Zachary, 2022. "Decent Wage Floors in Europe: Does the Minimum Wage Directive Get It Right?," IZA Discussion Papers 15660, Institute of Labor Economics (IZA).
    4. Dolado, Juan J. & Lalé, Etienne & Turon, Hélène, 2021. "Zero-Hours Contracts in a Frictional Labor Market," IZA Discussion Papers 14979, Institute of Labor Economics (IZA).
    5. Emiel van Bezooijen & Wiljan van den Berge & Anna Salomons, 2024. "The Young Bunch: Youth Minimum Wages and Labor Market Outcomes," ILR Review, Cornell University, ILR School, vol. 77(3), pages 428-460, May.
    6. 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.
    7. Shafik, Minouche, 2021. "Capitalism needs a new social contract," LSE Research Online Documents on Economics 112213, London School of Economics and Political Science, LSE Library.
    8. Egidio Farina & Colin Green & Duncan McVicar, 2021. "Are Estimates of Non‐Standard Employment Wage Penalties Robust to Different Wage Measures? The Case of Zero‐hour Contracts in the UK," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 60(3), pages 370-399, July.
    9. Nikhil Datta & Stephen Machin, 2021. "Living wages and age discontinuities for low-wage workers," CEP Discussion Papers dp1803, Centre for Economic Performance, LSE.
    10. 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).
    11. Christopher T. Stanton & Catherine Thomas, 2020. "The Gig Economy Beyond Local Services and Transportation," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 21(03), pages 21-26, September.
    12. 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.
    13. Datta, Nikhil & Machin, Stephen, 2024. "Government Contracting and Living Wages > Minimum Wages," IZA Discussion Papers 17117, Institute of Labor Economics (IZA).
    14. Nikhil Datta, 2019. "Willing to pay for security: a discrete choice experiment to analyse labour supply preferences," CEP Discussion Papers dp1632, Centre for Economic Performance, LSE.
    15. Minouche Shafik, 2021. "Capitalism needs a new social contract [‘Does the US Tax Code Favor Automation?’]," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 37(4), pages 758-772.
    16. 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.
    17. Nikhil Datta, 2023. "The measure of monopsony: the labour supply elasticity to the firm and its constituents," CEP Discussion Papers dp1930, Centre for Economic Performance, LSE.
    18. Brian Bell & Mihai Codreanu & Stephen Machin, 2020. "What can previous recessions tell us about the Covid-19 downturn?," CEP Covid-19 Analyses cepcovid-19-007, Centre for Economic Performance, LSE.
    19. 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).
    20. Karen Jaehrling & Thorsten Kalina, 2020. "‘Grey zones’ within dependent employment: formal and informal forms of on-call work in Germany," Transfer: European Review of Labour and Research, , vol. 26(4), pages 447-463, November.
    21. Innocenti, Stefania & Golin, Marta, 2022. "Human capital investment and perceived automation risks: Evidence from 16 countries," Journal of Economic Behavior & Organization, Elsevier, vol. 195(C), pages 27-41.
    22. Stephen Machin, 2024. "Real wages, inequality and living standards," CEP Election Analysis Papers 066, Centre for Economic Performance, LSE.
    23. 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.
    24. Datta, Nikhil, 2023. "The measure of monopsony: the labour supply elasticity to the firm and its constituents," LSE Research Online Documents on Economics 121312, London School of Economics and Political Science, LSE Library.

    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. Giupponi, Giulia & Machin, Stephen, 2018. "Changing the structure of minimum wages: firm adjustment and wage spillovers," LSE Research Online Documents on Economics 88684, London School of Economics and Political Science, LSE Library.
    2. Arindrajit Dube & Attila S. Lindner, 2024. "Minimum Wages in the 21st Century," NBER Working Papers 32878, National Bureau of Economic Research, Inc.
    3. Brian Bell & Stephen Machin, 2018. "Minimum Wages and Firm Value," Journal of Labor Economics, University of Chicago Press, vol. 36(1), pages 159-195.
    4. Lei Xu & Yu Zhu, 2023. "Does the employment effect of national minimum wage vary by non‐employment rate? A regression discontinuity approach," Manchester School, University of Manchester, vol. 91(1), pages 18-36, January.
    5. Sebastian Link, 2019. "The Price and Employment Response of Firms to the Introduction of Minimum Wages," CESifo Working Paper Series 7575, CESifo.
    6. Dale Belman & Paul Wolfson & Kritkorn Nawakitphaitoon, 2015. "Who Is Affected by the Minimum Wage?," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 54(4), pages 582-621, October.
    7. Carlos Oliveira, 2022. "How is the Minimum Wage Shaping the Wage Disitribution: Bite, Spillovers, and Wage Inequality," GEE Papers 0160, Gabinete de Estratégia e Estudos, Ministério da Economia, revised May 2022.
    8. Baek, Jisun & Lee, Changkeun & Park, WooRam, 2021. "The impact of the minimum wage on the characteristics of new establishments: Evidence from South Korea," Labour Economics, Elsevier, vol. 72(C).
    9. Mayneris, Florian & Poncet, Sandra & Zhang, Tao, 2018. "Improving or disappearing: Firm-level adjustments to minimum wages in China," Journal of Development Economics, Elsevier, vol. 135(C), pages 20-42.
    10. Oliveira, Carlos, 2021. "How is the Minimum Wage Shaping the Wage Distribution: Minimum Wage, Spillovers, and Wage Inequality in Portugal," MPRA Paper 112534, University Library of Munich, Germany.
    11. Matthew T. Gustafson & Jason D. Kotter, 2023. "Higher Minimum Wages Reduce Capital Expenditures," Management Science, INFORMS, vol. 69(5), pages 2933-2953, May.
    12. Laporsek, Suzana & Orazem, Peter F. & Vodopivec, Matija & Vodopivec, Milan, 2019. "Long-Term Responses to Large Minimum Wage Shocks: Sub-Minimum and Super-Minimum Workers in Slovenia," IZA Discussion Papers 12123, Institute of Labor Economics (IZA).
    13. Peter Harasztosi & Attila Lindner, 2019. "Who Pays for the Minimum Wage?," American Economic Review, American Economic Association, vol. 109(8), pages 2693-2727, August.
    14. Alan Manning, 2021. "The Elusive Employment Effect of the Minimum Wage," Journal of Economic Perspectives, American Economic Association, vol. 35(1), pages 3-26, Winter.
    15. Neumark David, 2019. "The Econometrics and Economics of the Employment Effects of Minimum Wages: Getting from Known Unknowns to Known Knowns," German Economic Review, De Gruyter, vol. 20(3), pages 293-329, August.
    16. Gregory, Terry & Zierahn, Ulrich, 2022. "When the minimum wage really bites hard: The negative spillover effect on high-skilled workers," Journal of Public Economics, Elsevier, vol. 206(C).
    17. Mirko Draca & Stephen Machin & John Van Reenen, 2011. "Minimum Wages and Firm Profitability," American Economic Journal: Applied Economics, American Economic Association, vol. 3(1), pages 129-151, January.
    18. Niklas Engbom & Christian Moser, 2022. "Earnings Inequality and the Minimum Wage: Evidence from Brazil," American Economic Review, American Economic Association, vol. 112(12), pages 3803-3847, December.
    19. Marius Berger & Bruno Lanz, 2020. "Minimum wage regulation in Switzerland: survey evidence for restaurants in the canton of Neuchâtel," Swiss Journal of Economics and Statistics, Springer;Swiss Society of Economics and Statistics, vol. 156(1), pages 1-23, December.
    20. Sotomayor, Orlando J., 2021. "Can the minimum wage reduce poverty and inequality in the developing world? Evidence from Brazil," World Development, Elsevier, vol. 138(C).

    More about this item

    Keywords

    J31; J32; J81;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
    • J81 - Labor and Demographic Economics - - Labor Standards - - - Working Conditions

    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:oup:ecpoli:v:34:y:2019:i:99:p:369-427.. 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: Oxford University Press (email available below). General contact details of provider: https://edirc.repec.org/data/cebruuk.html .

    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.