How Do Firms Attain Internal and External Flexibility of Employment?

Taiyo Fukai, Daiji Kawaguchi, Ayako Kondo and Izumi Yokoyama

Discussion papers from Research Institute of Economy, Trade and Industry (RIETI)

Abstract: Firms increasingly rely on workers with nonstandard contracts, but the underlying economic factors that distinguish workers on standard contracts from those on nonstandard contracts is poorly understood. We study their asymmetric employment and wage adjustments to examine whether the differences in the importance of firm-worker relation specificity between the two types of workers is a fundamental source of heterogeneity. Leveraging the exogenous shock that stems from exchange rate fluctuation and heterogeneous trade exposure between firms, we find that firms absorb temporary shocks by adjusting the number of dispatched workers from temporary help agencies and adjusting bonuses of in-house workers instead of reducing the number of in-house workers employed.

Pages: 38 pages
Date: 2023-12
New Economics Papers: this item is included in nep-bec
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.rieti.go.jp/jp/publications/dp/23e089.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eti:dpaper:23089

Access Statistics for this paper

More papers in Discussion papers from Research Institute of Economy, Trade and Industry (RIETI) Contact information at EDIRC.
Bibliographic data for series maintained by TANIMOTO, Toko ().