Flexibility or certainty? The aggregate effects of casual jobs on labour markets

Rachel Scarfe

Research output: Working paperDiscussion paper

Abstract / Description of output

There is much debate about the extent to which governments should regulate labour markets. One discussion concerns casual jobs, where firms do not need to guarantee workers certain, fixed, hours of work and instead “call-up” workers as and when needed. These jobs, sometimes known as “zero-hours”, “contingent” or “on-demand”, provide flexibility for firms to change the size of their workforce cheaply and quickly and for workers to choose whether to supply labour in every period. This flexibility comes at the expense of certainty for both firms and workers. In this paper I develop a search and matching model incorporating casual jobs, which I use to evaluate the effect of labour market policies on aggregate outcomes. I find that a ban on casual jobs leads to higher unemployment, but also to higher production and aggregate worker utility. I also consider the effect of a higher minimum wage for casual jobs. I find that the effects are limited. These results are due to an offsetting mechanism: although higher wages lead to higher unemployment, as firms offer more full-time jobs, the number of workers actually called-up to work increases
Original languageEnglish
PublisherEdinburgh School of Economics Discussion Paper Series
Number of pages48
Publication statusPublished - Dec 2019

Publication series

NameEdinburgh School of Economics - Discussion Paper Series

Keywords / Materials (for Non-textual outputs)

  • unemployment
  • welfare
  • minimum wages
  • contingent work
  • ondemand work
  • policy
  • E24
  • J21
  • J48
  • J64


Dive into the research topics of 'Flexibility or certainty? The aggregate effects of casual jobs on labour markets'. Together they form a unique fingerprint.

Cite this