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Title: Competition and Contracting: The Effect of Competition Shocks on Alternative Work Arrangements in the U.S. Labor Market 1995-2005

Citation Type: Working Paper

Publication Year: 2018

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Abstract: Alternative Work Arrangements (AWAs) are contract forms commonly associated with less attachment , lower wages, and fewer worker benefts. Even though AWAs are theoretically cheaper for frms, they continue to account for only 10% of employment. I explore why AWAs are not more widely used, given their purported economic beneft for frms. Legal rules suggest that while AWAs have lower fxed costs of employment, they may be less productive than standard employment and likely attract lower-type workers. In this instance, AWAs are used as a mechanism for frms to reduce fxed labor costs in response to a shock. Testing this prediction, I provide the frst evidence that competition shocks, specifcally trade shocks, causally increase the use of AWAs across a number of contract forms. Using micro-level data, I show that competition shocks appear to increase the probability of manufacturing workers being hired by temporary-help agencies, and decrease the probability of manufacturing workers becoming independent contractors. This suggests workers may have shifted towards AWAs in non-manufacturing industries. I also show that AWAs are associated with lower wages and fewer benefts after conditioning on industry and occupation, and are associated with higher rates of inequality.

Url: https://www.dol.gov/sites/dolgov/files/OASP/legacy/files/Deibler-DOL-Final-Paper.pdf

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Authors: Deibler, Daniel Mark

Series Title: U.S. Department of Labor (DOL)

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Institution: Columbia University

Pages: 60

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Data Collections: IPUMS CPS

Topics: Labor Force and Occupational Structure

Countries: United States