Stability versus Flexibility: The Role of Temporary Employment in Labour Adjustment
Shutao Cao and
Danny Leung ()
Staff Working Papers from Bank of Canada
In Canada, temporary workers account for 14 per cent of jobs in the non-farm business sector, are present in a range of industries, and account for 40 per cent of the total job reallocation. Yet most models of job reallocation abstract from temporary workers. This paper evaluates the importance of temporary workers in job reallocation in a multi-sector model with costly labour adjustment and temporary workers. The calibrated model captures some features of job reallocation in Canada. The paper shows that the adjustment cost parameters for permanent workers are underestimated if temporary workers are ignored. It also shows that when a shock occurs where permanent workers bear the brunt of reallocation (e.g. the 2005-2008 commodity price boom and the appreciation of the Canadian dollar), aggregate adjustment costs are underestimated if temporary workers are not accounted for.
Keywords: Labour markets; Productivity (search for similar items in EconPapers)
JEL-codes: D24 J32 (search for similar items in EconPapers)
Pages: 46 pages
New Economics Papers: this item is included in nep-bec, nep-dge and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4) Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:bca:bocawp:10-27
Access Statistics for this paper
More papers in Staff Working Papers from Bank of Canada 234 Wellington Street, Ottawa, Ontario, K1A 0G9, Canada. Contact information at EDIRC.
Bibliographic data for series maintained by ().