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Zero-hours Contracts in a Frictional Labor Market

Author

Listed:
  • Juan J. Dolado

    (Universidad Carlos III de Madrid, CEPR and IZA)

  • Etienne Lale

    (University of Quebec in Montreal, CIRANO and IZA)

  • Helene Turon

    (University of Bristol and IZA)

Abstract

We propose a model to evaluate the U.K.'s zero-hours contract (ZHC) - a contract that exempts employers from the requirement to provide any minimum working hours, and allows workers to decline any workload. We find quantitatively mixed welfare effects of ZHCs. On one hand they unlock job creation among firms that face highly volatile business conditions and increase labor force participation of individuals who prefer flexible work schedules. On the other hand, the use of ZHCs by less volatile firms, where jobs are otherwise viable under regular contracts, reduces welfare and likely explains negative employee reactions to this contract.

Suggested Citation

  • Juan J. Dolado & Etienne Lale & Helene Turon, 2022. "Zero-hours Contracts in a Frictional Labor Market," Working Papers 22-02, Chair in macroeconomics and forecasting, University of Quebec in Montreal's School of Management.
    • Handle: RePEc:bbh:wpaper:22-02
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    References listed on IDEAS

    as
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    Cited by:

    1. Garcia-Louzao, Jose & Hospido, Laura & Ruggieri, Alessandro, 2023. "Dual returns to experience," Labour Economics, Elsevier, vol. 80(C).
    2. Pauline Carry, 2022. "The Effects of the Legal Minimum Working Time on Workers, Firms and the Labor Market," Working Papers hal-04067393, HAL.
    3. Pauline Carry, 2022. "The Effects of the Legal Minimum Working Time on Workers, Firms and the Labor Market," SciencePo Working papers Main hal-04067393, HAL.

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    More about this item

    Keywords

    Zero-hours contracts; Working hours; Gig economy; Flexibility.;
    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
    • 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
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • L84 - Industrial Organization - - Industry Studies: Services - - - Personal, Professional, and Business Services

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