Zero-Hours Contracts in a Frictional Labor Market

Arbeitspapier

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 employees to decline any workload. We find quantitatively that ZHCs improve welfare by enabling firms with more volatile business conditions to create additional jobs. While weaker than job creation, substitution effects – some jobs that are otherwise viable under regular contracts are advertised as ZHCs – are sizable and likely explain negative reactions against ZHCs. Our model also assesses increased labor-force participation from ZHCs which appeal to individuals who prefer flexible work schedules.

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• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 14979

Classification and Topics

• Classification: Wirtschaft ; Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity ; Time Allocation and Labor Supply ; Labor Demand ; Labor Turnover; Vacancies; Layoffs ; Personal, Professional, and Business Services
• Subject: zero-hours contracts ; working hours ; gig economy ; flexibility

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Dolado, Juan J. ; Lalé, Etienne ; Turon, Hélène
• Event: Veröffentlichung
• (who): Institute of Labor Economics (IZA)
• (where): Bonn
• (when): 2021

Further information

• Handle: http://hdl.handle.net/10419/250640