Zero-Hours Contracts in a Frictional Labor Market

Juan Dolado, Etienne Lalé () and Hélène Turon

No 14979, IZA Discussion Papers from Institute of Labor Economics (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 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.

Keywords: zero-hours contracts; working hours; gig economy; flexibility (search for similar items in EconPapers)
JEL-codes: E24 J22 J23 J63 L84 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2021-12
New Economics Papers: this item is included in nep-dge, nep-lma, nep-ltv and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Related works:
Working Paper: Zero-hours Contracts in a Frictional Labor Market (2022)
Working Paper: Zero-hours Contracts in a Frictional Labour Market (2022)
Working Paper: Zero-hours Contracts in a Frictional Labor Market (2022)
Working Paper: Zero-hours Contracts in a Frictional Labor Market (2021)
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