Contract employment as a worker discipline device*

• 成果类型: Article
• 署名作者: Basu, Arnab K.; Chau, Nancy H.; Soundararajan, Vidhya
• 署名单位: Cornell University; Indian Institute of Management (IIM System); Indian Institute of Management Bangalore
• 刊物名称: JOURNAL OF DEVELOPMENT ECONOMICS
• ISSN/ISSBN: 0304-3878
• DOI: 10.1016/j.jdeveco.2020.102601
• 发表日期: 2021
• 关键词: Fixed-term contract employment; Two-tiered labor markets; Self-enforcing contracts

摘要

Fixed-term labor contracting has increasingly replaced regular open-ended employment in developing countries. What justifies its emergence? What determines its intensity? What policy responses are appropriate, if any? In a two-tiered task-based model of the labor market, we demonstrate that within establishments, fixed-term contracting can indeed co-exist with open-ended efficiency wage contracts as it enables firms to enforce regular worker discipline at strictly lower cost. Furthermore, the intensity of fixed-term employment is shown to increase even in times of rising labor demand, if a fixed-term worker status does not increase the likelihood of regular job arrival. Using establishment-level data from Indian manufacturing, we find evidence consistent with such an assumption. Policy-wise, the model unveils two margins of hiring distortions associated with fixed-term employment - task assignment and total employment distortions -against which the merits of a suite of oft-noted labor market flexibility policies can be assessed.