LABOR CONTRACTS AND FLEXIBILITY: EVIDENCE FROM A LABOR MARKET REFORM IN SPAIN

This paper evaluates the effects of a labor market reform in Spain that removed restrictions on fixed‐term or temporary contracts. Our empirical results are based on longitudinal firm‐level data that cover observations before and after the reform. We posit and estimate a dynamic labor demand model with indefinite and fixed‐term labor contracts, and a general structure of labor adjustment costs. Experiments using the estimated model show important positive effects of the reform on total employment (i.e., a 3.5% increase) and job turnover. There is a strong substitution of permanent by temporary workers (i.e., a 10% decline in permanent employment). The effects on labor productivity and the value of firms are very small. In contrast, a counterfactual reform that halved all firing costs would produce the same employment increase as the actual reform, but much larger improvements in productivity and in the value of firms. (JEL J23, J32, J41)     

Employment growth in the temporary help supply industry

During the 1980s, a significant increase occurred in the employment of temporary workers — employees hired for a specific task and for a limited duration — because of changing economic conditions that raised both the demand for and supply of temporary workers. Using time-series data, we investigate the factors that influenced temporary employment growth by analyzing the expansion in the temporary help supply (THS) industry. On the demand side, increasing aggregate output and heightened foreign competition were the most important factors that encouraged firms to hire temporary workers. On the supply side, increasing participation of certain demographic groups, notably married women, shifted the supply curve of temporary workers outward. We thank Nathan Balke, Bonnie Fisher, and Jeff Mills for helpful comments.     

Vers une représentation européenne des salariés. Les comités d’entreprise européens face aux restructurations

Nearly 900 European works councils (EWCs), transnational committees for informing and consulting workers, are now active in firms operating across borders inside Europe. How do they help establish a European industrial relations system? How have these new forms of representation been molded into a collective actor that is making itself heard at the EU level, in particular when the firms where EWCs exist are to be restructured? The intent is to see how an “additive logic”, whereby the EWC is the sum of the representatives of the firm's European workers, turns into an “integrative logic”, whereby the EWC becomes the place of a European representation of these workers. This study follows European works councils from the negotiations leading to their creation to their activities in coping with economic restructuring. It shows how they take part in the Europeanization and renewal of collective action in the social Europe under construction.     

A Note on Dual Internal Labor Markets and Wages of Temporary Workers: Evidence from Linked-Employer-Employee Data

I use linked employer-employee data from the German Federal Statistical Office to estimate within-firm wage differentials between temporary workers with fixed-term contracts and workers with permanent contracts in the context of dual internal labor markets. Wage-tenure profiles of permanent workers are estimated separately for each firm to obtain a proxy for the prevalence of internal labor markets. Temporary workers earn significantly lower wages in firms with steeper wage-tenure profiles. This finding is consistent with the segmentation in a primary permanent workforce with high wages and a secondary temporary workforce with low wages, if internal labor markets are more prevalent.     

The 2011 Industrial Relations Reform and Nominal Wage Adjustments in Greece

This study investigates nominal contractual base-wage adjustments in Greece associated with the 2011 industrial relations reform which re-defined the limits within which base wages could oscillate and allowed workers’ associations to negotiate for wages at the firm level. The assessment covers the period 2010–2013 and is based on information extracted from the universe of firm-level contracts signed in this period. We found that firm-level contracts increased dramatically shortly after the reform, now covering a larger pool of workers, especially in larger firms, and are associated with higher base-wage reductions in the post-reform period. At the firm level, wage reductions are higher when workers are represented by a workers’ association rather than a typical trade union. In addition, a heterogeneous effect is uncovered regarding the factors that shape base-wage adjustments (firm size, profitability, structure of bargaining body and aggregate unemployment) between new and traditional forms of workers’ representation in collective bargaining.     

Innovation, workers skills and industrial relations: Empirical evidence from firm-level Italian data

The shifting of labour demand toward relatively more skilled workers has been a hot issue in the economic field for many years. A consolidated explanation for the upskilling phenomenon is that technological–organisational changes have driven the labour demand with detrimental consequences for less skilled workers (skill-biased technological–organisational change). In order to upgrade the skill workforce the firm has at least two main channels at its disposal: the external labour market strategy, mainly based on hiring and firing mechanisms; the internal labour market strategies, which improve the skill base of the employees through training activities.The main objective of the present work is to verify the relations between innovative strategies and both the workforce composition and the training activities, within an integrated framework that also leads us to consider the role of specific aspects of the industrial relations system.The firm level analysis is based on original datasets which include data on manufacturing firms for two Italian local production systems, located in the Emilia-Romagna region.The results suggest that the firms use both the two channels to improve their skill base, which is actually related to the innovation activities, although there is weak supporting evidence of the use of external labour markets to upgrade the workforce skills: the upskilling phenomenon seems to be associated to specific innovative activities in the technological sphere, while specific organisational aspects emerge as detrimental for blue collars. On the side of internal labour market strategies the evidence supports the hypothesis that innovation intensity induces the firms to implement internal procedures in order to upskill the workforce, confirming the importance of internal labour market strategies. Moreover, we have recognized the important role of firm level industrial relations in determining the training activities for the blue collar workers.     

Service vs. manufacturing: how to address more effectively eco-innovation public policies by disentangling the different characteristics of industries

Eco-innovation is actually a fashionable topic, and several researchers are working on understanding the defining characteristics of firms that consider the environment as a priority when innovating. To date most of these studies have been carried out on manufacturing industries. This article investigates the similarities and differences among service and manufacturing firms. An empirical analysis of a sample of 5509 Spanish companies shows that the variables affecting the eco-innovative orientation of firms are quite similar. Results reveal that manufacturing firms have higher orientation toward the environment than service firms. Furthermore, highly polarized positions in environmental aspects can be found. Despite the limitations of the study, conclusions may help public policy to encourage environmental proactivity in service industry and innovation.     

Mind the Gap,Please! The Effect of Temporary Help Agencies on the Consequences of Work Accidents

Using data from a Spanish register on work-related accidents, this paper analyses the effect of contract types on two consequences of accidents: the probability of suffering a serious/fatal accident and the number of working days lost after an accident has happened. The focus is on the difference among temporary workers hired through temporary help agencies, direct temporary workers and open-ended workers. We find that workers hired through temporary help agencies are less likely to suffer serious/fatal accidents and the durations of their absences are shorter when they do, compared with workers holding either open-ended contracts or direct temporary contracts once personal, job and accident characteristics are controlled for.     

NEW FACTS ABOUT FIRM RISK ACROSS COUNTRIES AND OVER THE BUSINESS CYCLE

The characteristics of firm‐level risk over the cycle and across countries are studied in this paper. Low idiosyncratic firm‐level risk is found to be a feature of highly developed, stable economies, whereas the countercyclicality of firm‐level risk is associated with flexible as well as stable economies. These facts are uncovered with the help of a theoretical model where small, risk‐averse firms display procyclical risk, whereas larger, risk‐neutral firms have countercyclical risk patterns that depend on the rigidity of the business environment. The predictions of the model are then confirmed by the data using a large international firm‐level database (ORBIS) together with the World Bank Doing Business Database, during the “Great Recession” across 55 countries. The findings are critical for the growing literature of uncertainty driven business cycles, and show that firm‐level uncertainty cannot be treated as an exogenous parameter. (JEL D21, D22, E32, F44, L11, L25)     

A Chinese Model for Labour in Europe?

Based on long-term fieldwork in multiple locations, our article questions the approach that posits a Chinese model of work and employment relations as increasingly exporting its form of labour management and dominating worldwide. It does so by focusing on Europe and discussing two labour regimes considered as typically Chinese: the Chinese fashion workshops in the Italian fashion industry, and the Foxconn electronics plants in the Czech Republic. Our findings bring new insights to bear on issues for which research is still thin on the ground and challenge the hypothesis of a ‘Chinesisation’ of work and employment practices in Chinese small firms and MNCs operating in Europe. We move the focus away from the simple analysis of firm management prevailing in the literature and suggest that, in order to understand the firm’s behaviours, the role of the state, the unions, the migrant workers and the role of temporary work agencies should all be taken into consideration.     

The Effect of Unemployment Insurance on Temporary Help Services Employment

A model with fixed effects and controls for state-specific linear time trends is developed to analyze the influence of state unemployment insurance taxes on temporary help services employment using state level panel data from the Bureau of Labor Statistics’ Quarterly Census of Employment and Wages. Prior research has shown that imperfect experience rating of unemployment insurance taxes increases temporary layoffs and that, conversely, more extensive experience rating leads to a decrease in temporary layoffs. The current analysis demonstrates that more extensive experience rating increases temporary help services agency-intermediated temporary employment. To the extent that the increase in temporary help services employment represents a substitution of temporary help services jobs for traditional direct hire jobs, it implies a negative effect on job quality. Steps to address low unemployment insurance recipiency rates by temporary help services workers may alleviate the impact of unemployment insurance tax structures on temporary help services employment.     

Business strategy and the social norm of tipping

Tipping is an important economic phenomenon, involving about $47 billion a year in the US food industry alone, and trillions of dollars across different occupations and countries over the years. Moreover, tipping is a major source of income for millions of workers. This article discusses the implications of tipping for business strategy in the relevant industries. For example, firms can choose to impose a compulsory service charge in lieu of tipping - what are the advantages and disadvantages of doing so? How does tipping change the profit-maximizing level of investing in screening job applicants, training workers, monitoring them, and providing performance-based incentives by the firm? Can industries such as the music industry use tips (i.e., prices being voluntary and determined by the customers) as an alternative business model?     

Temporary Work in the Public Services: Implications for Equal Opportunities

This article examines the impact of the growing number of temporary employment contracts in the public sector on equal opportunity theory, policy and practice. Quantitative and qualitative data from two case study local authorities are utilized to examine the mechanisms by which temporary work becomes an equal opportunities issue. A strong association between part‐time work and temporary employment status is demonstrated as an important aspect of the gendered nature of temporary work. Links between ethnicity and temporary work are less clear but are based upon the insecurity of targeted funding for teachers and the under‐valuation of the skills of the workers concerned. The data indicate that temporary workers are largely excluded from equal opportunity policy and practice, bringing into question a concept of equality that can permit less favourable treatment for certain groups of workers. It is argued that public sector restructuring, particularly concerning decentralization and the quest for flexibility, has facilitated the differential treatment of employees, thereby fundamentally eroding the basis of equal opportunity policy and practice.     

Induced inefficiency as a response to the union threat

Milkman and Mitchell (1995) extend Rosen’s (1969) threat-effect hypothesis to suggest that the threat of unionization can induce inefficient underutilization of labor by nonunion firms. If firms follow this strategy, the apparent paradox of competitive coexistence in the face of higher union wages reflects induced nonunion firm inefficiency rather than superior union firm efficiency. Furthermore, this strategy decreases demand for nonunion workers in a partially unionized industry. A generalized cost function analysis of data from sawmills in the Pacific Northwest yields evidence that nonunion firms use this strategy.     

Temporary employment experiences of women on welfare

Females with recent participation in public welfare are a disproportionate and growing share of temporary help services firm employees. Research documenting low earnings, frequent job transitions, and low benefit rates among temporary workers has raised concerns that welfare recipients taking these jobs might have poorer labor market outcomes than those entering permanent positions. My findings show that a majority of welfare recipients working in temporary jobs were satisfied with their pay and working conditions and did not earn much less than those in other jobs. They did report, however, high levels of dissatisfaction with the lack of employment benefits received, and their annual earnings were still very low, reflecting chronic job instability that is endemic to the welfare population.     

Institutional legacies in TNCs and their management through training academies: the case of transnational law firms in Italy

In this article we highlight the effects of heterogeneous institutional contexts on transnational professional service firms, a relatively poorly studied issue. Specifically, we provide empirical analysis of how the specificities of the Italian institutional context affect the activities of English legal professional service firms in Milan. This reveals the intimate connection between a variety of capitalism, place specific workplace cultures and practices, and the institution‐related challenges transnational professional service firms and all transnational corporations (TNCs) face. We also reveal the way institutionally generated differences at the level of work practices are managed in transnational law firms through worldwide training programmes designed to ‘govern’ the practices of workers in different parts of the TNC's network. This emphasizes the importance of studying attempts to manage institutional heterogeneity at the level of workplace practices, something often missed in existing mesoscale studies of TNC governance structures. Consequently, we highlight detailed empirical archaeologies that explore the direct links between institutions and practices as an important component of future research on the effects of institutions on TNCs.     

Firm Size and Work-Related Training: New Evidence on Incidence,Intensity, and Training Type from Australia

This study examines the relationship between firm size and structured work-related training by analyzing data from the 2001 installment of the Australian Bureau of Statistics’ Survey of Education and Training. The results show a positive correlation between the probability of training and firm size for both male and female workers. A similar positive correlation between the intensity of training and firm size is also evident. Although the incidence of training is roughly comparable for male and female workers, males tend to train significantly more hours than their female counterparts. The findings also indicate that much less training occurs in firms with fewer than 10 workers, especially in health and safety, management and professional, and technical and paraprofessional training. Such results suggest that research on the size-training effect using firm- or establishment-level data, which generally focus only on firms with 20 or more employees, cannot detect an important source of the potential training deficit.     

The Role of Temporary Help Agency Employment on Temp-to-Perm Transitions

This paper evaluates the impact of agency work on temporary workers’ posterior likelihood of being hired on a permanent basis. We use administrative data on two groups of temporary workers for whom we have complete work histories since they are first observed in 1998 until the year 2004. One group consists of workers employed through a temporary help agency (THA) at some point during the 7 year period under examination (treated group). The other group is composed of individuals employed as direct-hire temps at some point between 1998 and the year 2004, but never via a THA (control group). Using propensity score matching methods, we find that agency workers endure a lower likelihood of being hired on a permanent basis following their temporary assignment than their direct-hire counterparts. However, there are relevant differences for some groups of workers.

Technology and School Social Work Services: Introducing Technology in an Alternative School

SUMMARY

The public school system, one of the largest human service institutions in our nation, is continuously engaged in a struggle to balance the needs of a growing and diverse population with continuing threats of budget cuts. Under these conditions, it becomes even more critical that school social workers understand and appreciate the role of technology in delivering and evaluating services. To assess the effectiveness of school social work services, evaluation will have to be planned for, and systems of data collection and processing will have to be conducted on an ongoing basis.

This paper outlines the process whereby school social workers in a local school district proceeded to introduce technology into their service delivery regimen. Secondly, the paper shows how such technology was, and may be, used to evaluate the services provided by school social workers in an alternative school.     

Information and communication technology adoption in micro and small firms: Can internet access improve labour productivity?

The rapid spread of information and communication technologies (ICT) may increase firms’ productivity with important consequences for job creation and for economic growth. This article contributes to this discussion by analysing the impact of internet adoption on labour productivity and the mechanisms shaping this relationship in Peruvian micro and small manufacturing firms over the period 2011–2013. The article estimates a reduced form where labour productivity is a function of internet adoption and other explanatory factors. Internet adoption is instrumented using a measure of the availability of financial opportunities for micro and small firms in Peru. Findings indicate that internet adoption: (a) increases firms’ labour productivity; (b) reallocates employment away from temporary administrative workers and non‐remunerated workers and expands employment of permanent production workers; (c) leads to the formalization of labour relationships, to the implementation of new organizational practices and to the improvement of training measures. While changes in employment and formalization of workers are linked to labour productivity gains, increases in training measures and organizational changes do not generate any additional productivity increase. Policies oriented to promote the adoption of ICT in micro and small firms can be beneficial to close the productivity gap with larger firms in Peru. Moreover, policies directed to the formalization of the workforce can provide an extra benefit, i.e. additional labour productivity gains in firms adopting the internet. Finally, policies oriented to the development of digital skills are also important to ease the re‐employment of those workers losing their jobs and the achievement of additional productivity gains that new organizational practices can provide.