Flexible Labour, Firm Performance and the Dutch Job Creation Miracle
Unlike internal ('functional') forms of flexibility of labour, external ('numerical') forms of flexibility (i.e. high shares of people on temporary contract or a high turnover of personnel) yield substantial savings on a firm's wage bill. Savings on wage bills lead to higher...
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Published in | International review of applied economics Vol. 20; no. 2; pp. 171 - 187 |
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Main Authors | , , , |
Format | Journal Article |
Language | English |
Published |
New York
Routledge
01.04.2006
Taylor and Francis Journals Taylor & Francis Ltd |
Series | International Review of Applied Economics |
Subjects | |
Online Access | Get full text |
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Summary: | Unlike internal ('functional') forms of flexibility of labour, external ('numerical') forms of flexibility (i.e. high shares of people on temporary contract or a high turnover of personnel) yield substantial savings on a firm's wage bill. Savings on wage bills lead to higher job growth, but do not translate into higher sales growth. Externally flexible labour appears to be related to lower labour productivity growth, the effects being different for innovating vs non-innovating firms. We discuss these findings from firm-level and worker-level data against the background of the Dutch job creation miracle during the 1980s and 1990s. Modest wage increases and flexibilization of labour markets may indeed create lots of jobs. However, this is likely to happen at the expense of labour productivity growth, raising serious doubts about the long-run sustainability of a low-productivity-high-employment growth path. |
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Bibliography: | ObjectType-Article-2 SourceType-Scholarly Journals-1 ObjectType-Feature-1 content type line 23 |
ISSN: | 0269-2171 1465-3486 |
DOI: | 10.1080/02692170600581102 |