IDEAS home Printed from https://ideas.repec.org/p/ehl/lserod/126748.html
   My bibliography  Save this paper

Why do flexible work arrangements exist?

Author

Listed:
  • Datta, Nikhil

Abstract

This paper studies flexible work arrangements, with a focus on zero-hours contracts (ZHCs). Leveraging a unique dataset from a large UK firm in the low-pay sector, it provides novel descriptives on ZHC workers, as well as evidence on demand and supply side mechanisms for the use of ZHCs. The results show that ZHC workers experience significantly higher turnover rates and lower wages than permanent employees, and large heterogeneity in hours and earnings volatility. Causal evidence on the firm demand-side demonstrates that ZHCs help firms manage production and demand shocks. On the supply-side, ZHC roles attract 25% more applicants than comparable permanent jobs. ZHC roles are concentrated among specific demographics, and vacancy applicant and firm offer data demonstrates this is supply driven. Few ZHC workers apply for permanent positions and their decision to apply for a permanent position is wage insensitive. In contrast, permanent workers exhibit ZHC-wage elasticities that are an order of magnitude larger than those of their ZHC counterparts.

Suggested Citation

  • Datta, Nikhil, 2024. "Why do flexible work arrangements exist?," LSE Research Online Documents on Economics 126748, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:126748
    as

    Download full text from publisher

    File URL: http://eprints.lse.ac.uk/126748/
    File Function: Open access version.
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Elena Grinza & François Rycx, 2020. "The Impact of Sickness Absenteeism on Firm Productivity: New Evidence from Belgian Matched Employer–Employee Panel Data," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 59(1), pages 150-194, January.
    2. Abi Adams-Prassl & Tom Waters & Maria Balgova & Matthias Qian, 2023. "Firm concentration & job design: the case of schedule flexible work arrangements," IFS Working Papers W23/14, Institute for Fiscal Studies.
    3. Haoran He & David Neumark & Qian Weng, 2021. "Do Workers Value Flexible Jobs? A Field Experiment," Journal of Labor Economics, University of Chicago Press, vol. 39(3), pages 709-738.
    4. David Card & Ana Rute Cardoso & Joerg Heining & Patrick Kline, 2018. "Firms and Labor Market Inequality: Evidence and Some Theory," Journal of Labor Economics, University of Chicago Press, vol. 36(S1), pages 13-70.
    5. Alexandre Mas & Amanda Pallais, 2020. "Alternative Work Arrangements," Annual Review of Economics, Annual Reviews, vol. 12(1), pages 631-658, August.
    6. 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.
    7. 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.
    8. 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.
    9. Sun, Liyang & Abraham, Sarah, 2021. "Estimating dynamic treatment effects in event studies with heterogeneous treatment effects," Journal of Econometrics, Elsevier, vol. 225(2), pages 175-199.
    10. 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.
    11. Abi Adams-Prassl & Maria Balgova & Matthias Qian & Tom Waters, 2023. "Firm Concentration & Job Design: The Case of Schedule Flexible Work Arrangements," Economics Series Working Papers 1002, University of Oxford, Department of Economics.
    12. Maria Koumenta & Mark Williams, 2019. "An anatomy of zero‐hour contracts in the UK," Industrial Relations Journal, Wiley Blackwell, vol. 50(1), pages 20-40, January.
    Full references (including those not matched with items on IDEAS)

    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. Richard Audoly & Manudeep Bhuller & Tore Adam Reiremo, 2024. "The Pay and Non-Pay Content of Job Ads," Staff Reports 1124, Federal Reserve Bank of New York.
    2. 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).
    3. Guillaume Gueguen & Claudia Senik, 2023. "Adopting telework: The causal impact of working from home on subjective well‐being," British Journal of Industrial Relations, London School of Economics, vol. 61(4), pages 832-868, December.
    4. 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.
    5. Bas Scheer & Wiljan van den Berge & Maarten Goos & Alan Manning & Anna Salomons, 2022. "Alternative Work Arrangements and Worker Outcomes: Evidence from Payrolling," CPB Discussion Paper 435, CPB Netherlands Bureau for Economic Policy Analysis.
    6. Arindrajit Dube & Attila S. Lindner, 2024. "Minimum Wages in the 21st Century," NBER Working Papers 32878, National Bureau of Economic Research, Inc.
    7. Pérez, Jorge & Vial, Felipe & Zárate, Román, 2022. "Urban Transit Infrastructure: Spatial Mismatch and Labor Market Power," Research Department working papers 1992, CAF Development Bank Of Latinamerica.
    8. 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.
    9. Markus Nagler & Johannes Rincke & Erwin Winkler, 2024. "Working from home, commuting, and gender," Journal of Population Economics, Springer;European Society for Population Economics, vol. 37(3), pages 1-23, September.
    10. Musayir, Arlan & Arabsheibani, Reza, 2025. "Motherhood and Informality: Empirical Evidence from Russia," IZA Discussion Papers 17916, Institute of Labor Economics (IZA).
    11. Alan Manning & Graham Mazeine, 2020. "Subjective job insecurity and the rise of the precariat: evidence from the UK, Germany and the United States," CEP Discussion Papers dp1712, Centre for Economic Performance, LSE.
    12. Burgstaller, Lilith & Feld, Lars P. & Pfeil, Katharina, 2022. "Working in the shadow: Survey techniques for measuring and explaining undeclared work," Journal of Economic Behavior & Organization, Elsevier, vol. 200(C), pages 661-671.
    13. Laura Abrardi & Elena Grinza & Alessandro Manello & Flavio Porta, 2024. "Work from home arrangements and organizational performance in Italian SMEs: evidence from the COVID-19 pandemic," Empirical Economics, Springer, vol. 67(6), pages 2821-2863, December.
    14. Diego Daruich & Sabrina Di Addario & Raffaele Saggio, 2023. "The Effects of Partial Employment Protection Reforms: Evidence from Italy," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 90(6), pages 2880-2942.
    15. Jason Sockin, 2022. "Show Me the Amenity: Are Higher-Paying Firms Better All Around?," CESifo Working Paper Series 9842, CESifo.
    16. Peter Hull & Michal Kolesár & Christopher Walters, 2022. "Labor by design: contributions of David Card, Joshua Angrist, and Guido Imbens," Scandinavian Journal of Economics, Wiley Blackwell, vol. 124(3), pages 603-645, July.
    17. Wouter Zwysen, 2024. "Working apart: Domestic outsourcing in Europe," European Journal of Industrial Relations, , vol. 30(2), pages 221-241, June.
    18. Dami'an Vergara, 2022. "Minimum Wages and Optimal Redistribution," Papers 2202.00839, arXiv.org, revised Dec 2022.
    19. Adermon, Adrian & Hensvik, Lena, 2022. "Gig-jobs: Stepping stones or dead ends?," Labour Economics, Elsevier, vol. 76(C).
    20. Natalia Bermúdez-Barrezueta & Sam Desiere & Giulia Tarullo, 2025. "Hiring subsidies and temporary work agencies," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 25/1103, Ghent University, Faculty of Economics and Business Administration.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General

    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:ehl:lserod:126748. 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: LSERO Manager (email available below). General contact details of provider: https://edirc.repec.org/data/lsepsuk.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.