Periodic Reporting for period 1 - LABFLEX (Causes and Consequences of Labor Market Flexibility)
Periodo di rendicontazione: 2022-12-01 al 2025-05-31
A closer look at the evolving world of work
The world of work is changing and shows no signs of slowing down. Most recently, it has been affected by the Covid pandemic. However, globalisation and technological change have also had a big impact on the modern workplace. The ERC-funded LABFLEX project will focus on alternative work arrangements like outsourcing, sub-contracting, flexible scheduling and flexible pay jobs. These have become the ‘new normal’. The project will investigate the causes and consequences of labour market flexibility. It will try to explain the rise in wage inequality. The findings will paint a picture of the supply and the demand side of the labour market, facilitating a study of flexibility in job contracts.
Objective
Globalization and technological change have transformed the workplace and the organization of labor. At the core of these major developments is the degree of flexibility in the labor market. Alternative work arrangements, e.g. outsourcing, sub-contracting, flexible scheduling, and flexible pay jobs have become a common feature of labor markets across the globe. While most economists would argue that labor market flexibility facilitates reaping the benefits of globalization and technology growth, these developments can have far reaching consequences for the division of resources in society. Indeed, the recent decades have witnessed a sharp rise in wage inequality. LABFLEX is motivated by these developments and seeks to investigate the causes and consequences of labor market flexibility.
LABFLEX raises a series of questions: Do differences in job contracts reflect shifts in worker preferences, or do they mirror advances in technology that facilitate gains from organizing job tasks differently? What are the impacts of flexibility in job contracts on wage inequality and gender wage gaps? Are workers being compensated for the adverse work conditions or the higher income risks, or do changes in job contracts reflect changes in the sharing of rents between workers and firms? How do labor market institutions affect flexibility? And what is the role of labor market policies?
To answer these questions, LABFLEX will for the first-time link register data to large-scale experimental evidence on workers’ stated preferences for a wide array of work and pay arrangements, and an exhaustive full-text corpus of vacancies with information on job attributes. This will allow drawing a very detailed picture of both the supply and the demand side of the labor market, facilitating a study of flexibility in job contracts. Combining these data with experimental and structural methods, LABFLEX will provide new evidence on the causes and consequences of labor market flexibility.
Fields of science
social sciences -> economics and business -> business and management -> employment
social sciences -> sociology -> globalization
Keywords
Labor Market Flexibility
Wage Inequality
Alternative Work Arrangements
Performance Pay
Job Contracts
Compensating Differentials
Labor Market Institutions
Search Frictions
The world of work is changing and shows no signs of slowing down. Most recently, it has been affected by the Covid pandemic. However, globalisation and technological change have also had a big impact on the modern workplace. The ERC-funded LABFLEX project will focus on alternative work arrangements like outsourcing, sub-contracting, flexible scheduling and flexible pay jobs. These have become the ‘new normal’. The project will investigate the causes and consequences of labour market flexibility. It will try to explain the rise in wage inequality. The findings will paint a picture of the supply and the demand side of the labour market, facilitating a study of flexibility in job contracts.
Objective
Globalization and technological change have transformed the workplace and the organization of labor. At the core of these major developments is the degree of flexibility in the labor market. Alternative work arrangements, e.g. outsourcing, sub-contracting, flexible scheduling, and flexible pay jobs have become a common feature of labor markets across the globe. While most economists would argue that labor market flexibility facilitates reaping the benefits of globalization and technology growth, these developments can have far reaching consequences for the division of resources in society. Indeed, the recent decades have witnessed a sharp rise in wage inequality. LABFLEX is motivated by these developments and seeks to investigate the causes and consequences of labor market flexibility.
LABFLEX raises a series of questions: Do differences in job contracts reflect shifts in worker preferences, or do they mirror advances in technology that facilitate gains from organizing job tasks differently? What are the impacts of flexibility in job contracts on wage inequality and gender wage gaps? Are workers being compensated for the adverse work conditions or the higher income risks, or do changes in job contracts reflect changes in the sharing of rents between workers and firms? How do labor market institutions affect flexibility? And what is the role of labor market policies?
To answer these questions, LABFLEX will for the first-time link register data to large-scale experimental evidence on workers’ stated preferences for a wide array of work and pay arrangements, and an exhaustive full-text corpus of vacancies with information on job attributes. This will allow drawing a very detailed picture of both the supply and the demand side of the labor market, facilitating a study of flexibility in job contracts. Combining these data with experimental and structural methods, LABFLEX will provide new evidence on the causes and consequences of labor market flexibility.
Fields of science
social sciences -> economics and business -> business and management -> employment
social sciences -> sociology -> globalization
Keywords
Labor Market Flexibility
Wage Inequality
Alternative Work Arrangements
Performance Pay
Job Contracts
Compensating Differentials
Labor Market Institutions
Search Frictions
LABFLEX has developed a text-analysis methodology to detect pay and non-pay workplace attributes in vacancy texts and used this methodology to classify such information in a large-scale dataset of about 3 million vacancies published in Norway. A recent working paper titled “The Pay and Non-Pay Content of Job Ads”, which uses this text-analysis methodology, investigates how informative job ads are about pay and amenities offered by employers. LABFLEX has further created an open repository of pay and non-pay job attributes (i.e. text phrases). Information provided in this repository can be valuable to scholars interested in text-analysis more broadly, but also in implementing similar analyses to detect pay and non-pay content of job ads and texts in other contexts.
LABFLEX has implemented an online survey experiment to study individuals’ preferences for workplace amenities. Preliminary evidence from this survey experiment shows that workers do value workplace amenities in the sense that they are willing to give up substantial pay when offered jobs that provide workplace amenities (e.g. home office and flexible working hours) and similarly must be compensated with substantially higher pay to accept jobs involving shift work or temporary work.
LABFLEX has provided insights about how collective bargaining and sectoral minimum wages influence firms’ labor adjustments and create institutional wage rigidities and how flexibility in job contracts affects firms’ labor adjustments in response to external shocks. The article “Facts and Fantasies about Wage Setting and Collective Bargaining” in the Journal of Economic Perspectives, 36 (4), Fall 2022, p. 29-52, documents key facts about institutional rigidities and wage flexibility related to the two-tier collective bargaining system and sectoral minimum wages in the Norwegian labor market. Further, a recent working paper titled “Firms' Internal and External Labor Adjustments” shows how firms that faced a large negative shock made several adjustments in both their internal and external labor (e.g. sub-contracted workforce), and further how these adjustments depend on the presence of local labor unions.
LABFLEX has implemented an online survey experiment to study individuals’ preferences for workplace amenities. Preliminary evidence from this survey experiment shows that workers do value workplace amenities in the sense that they are willing to give up substantial pay when offered jobs that provide workplace amenities (e.g. home office and flexible working hours) and similarly must be compensated with substantially higher pay to accept jobs involving shift work or temporary work.
LABFLEX has provided insights about how collective bargaining and sectoral minimum wages influence firms’ labor adjustments and create institutional wage rigidities and how flexibility in job contracts affects firms’ labor adjustments in response to external shocks. The article “Facts and Fantasies about Wage Setting and Collective Bargaining” in the Journal of Economic Perspectives, 36 (4), Fall 2022, p. 29-52, documents key facts about institutional rigidities and wage flexibility related to the two-tier collective bargaining system and sectoral minimum wages in the Norwegian labor market. Further, a recent working paper titled “Firms' Internal and External Labor Adjustments” shows how firms that faced a large negative shock made several adjustments in both their internal and external labor (e.g. sub-contracted workforce), and further how these adjustments depend on the presence of local labor unions.
LABFLEX has implemented an online survey experiment to study individuals’ preferences for workplace amenities. Our survey design introduced several novel features that surpassed initial expectations, marking a notable advancement in methodology to measure individual preferences.