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

Author

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  • 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.

Suggested Citation

  • Muriel Roger & Sebastien Roux, 2000. "Flexibility Versus Hiring Costs: The Demand for Part-time Labor," Research Unit Working Papers 0101, Laboratoire d'Economie Appliquee, INRA.
  • Handle: RePEc:lea:leawpi:0101
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    File URL: http://www.inra.fr/Internet/Departements/ESR/UR/lea/documents/wp/wp0101.pdf
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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.

    More about this item

    Keywords

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

    JEL classification:

    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand

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