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Work Incentives and the Demand for Primary and Contingent Labor

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  • James B. Rebitzer
  • Lowell J. Taylor

Abstract

This paper presents an incentive-based dual labor market model. Three implications of the model are emphasized. First, in equilibrium, there is an excess supply of workers to primary jobs. Second, when demand is uncertain, firms may choose a mix of primary and contingent workers to perform the same job, even when these workers are perfect substitutes in production. Third, firms prefer to hire into primary jobs workers with strong job attachment and workers whose preferences lead them to prefer long work hours. We argue that industries with high proportions of part-time workers will tend to have large concentrations of contingent workers. The empirical finding that the wages and benefits of full-time workers are significantly reduced in industries with large concentrations of part-time workers appears consistent with this hypothesis.

Suggested Citation

  • James B. Rebitzer & Lowell J. Taylor, 1991. "Work Incentives and the Demand for Primary and Contingent Labor," NBER Working Papers 3647, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:3647 Note: LS
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    References listed on IDEAS

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    1. Katharine G. Abraham, 1988. "Flexible Staffing Arrangements and Employers' Short-Term Adjustment Strategies," NBER Working Papers 2617, National Bureau of Economic Research, Inc.
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    4. Freeman, Richard B, 1984. "Longitudinal Analyses of the Effects of Trade Unions," Journal of Labor Economics, University of Chicago Press, vol. 2(1), pages 1-26, January.
    5. George A. Akerlof & Lawrence F. Katz, 1989. "Workers' Trust Funds and the Logic of Wage Profiles," The Quarterly Journal of Economics, Oxford University Press, vol. 104(3), pages 525-536.
    6. Dickens, William T & Lang, Kevin, 1985. "A Test of Dual Labor Market Theory," American Economic Review, American Economic Association, vol. 75(4), pages 792-805, September.
    7. Bulow, Jeremy I & Summers, Lawrence H, 1986. "A Theory of Dual Labor Markets with Application to Industrial Policy,Discrimination, and Keynesian Unemployment," Journal of Labor Economics, University of Chicago Press, vol. 4(3), pages 376-414, July.
    8. Bowles, Samuel, 1985. "The Production Process in a Competitive Economy: Walrasian, Neo-Hobbesian, and Marxian Models," American Economic Review, American Economic Association, vol. 75(1), pages 16-36, March.
    9. Dickens, William T, et al, 1989. "Employee Crime and the Monitoring Puzzle," Journal of Labor Economics, University of Chicago Press, vol. 7(3), pages 331-347, July.
    10. Gintis, Herbert & Ishikawa, Tsuneo, 1987. "Wages, work intensity, and unemployment," Journal of the Japanese and International Economies, Elsevier, vol. 1(2), pages 195-228, June.
    11. Lazear, Edward P, 1979. "Why Is There Mandatory Retirement?," Journal of Political Economy, University of Chicago Press, vol. 87(6), pages 1261-1284, December.
    12. Alan B. Krueger, 1991. "The Evolution of Unjust-Dismissal Legislation in the United States," ILR Review, Cornell University, ILR School, vol. 44(4), pages 644-660, July.
    13. Rebitzer, James B, 1988. "Unemployment, Labor Relations, and Unit Labor Costs," American Economic Review, American Economic Association, vol. 78(2), pages 389-394, May.
    14. Alan B. Krueger & Lawrence H. Summers, 1986. "Reflections on the Inter-Industry Wage Structure," NBER Working Papers 1968, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Alba, Alfonso, 1997. "How temporary is temporary employment in Spain?," UC3M Working papers. Economics 7215, Universidad Carlos III de Madrid. Departamento de Economía.
    2. Pfeifer, Christian, 2005. "Betriebliche Determinanten von Teilzeitarbeit, Mini- und Midi-Jobs; Eine theoretische und empirische Analyse mit niedersächsischen Betriebsdaten," Hannover Economic Papers (HEP) dp-324, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
    3. Rebitzer, James B & Taylor, Lowell J, 1995. "Do Labor Markets Provide Enough Short-Hour Jobs? An Analysis of Work Hours and Work Incentives," Economic Inquiry, Western Economic Association International, vol. 33(2), pages 257-273, April.
    4. Pfeifer, Christian, 2007. "Eine theoretische und empirische Analyse der betrieblichen Determinanten von Teilzeitarbeit, Mini- und Midi-Jobs (A theoretical and empirical analysis of the company determinants of part-time work, mi," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 40(1), pages 65-76.
    5. repec:iab:iabzaf:v:40:i:1:p:65-76 is not listed on IDEAS

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