Careers and Contingency
Posted: 2 Sep 1998
Disagreement among legal scholars over the phenomenon of "contingent employment" has led to disparate prescriptions for reform. For some, government regulation of contingent work is at best unnecessary, and at worst counterproductive, and the best solution would be to eliminate the existing regulations that provide employers with the incentive to create contingent jobs. Others believe current regulations do not go far enough and advocate additional reforms, ranging from expanding mandatory benefits and protections, to facilitating collective bargaining among contingent workers in order to restore such benefits as long-term security, training, and career advancement. The debate about law reform has centered partly on disputes over the size, growth and characteristics of the contingency phenomenon. Workers described as "contingent" under various definitions are so eclectic as to render broad-brush claims on both sides of the debate misleading. As an alternative, I offer the concept of "underemployment"--a failure of the market to match workers with jobs that fully exploit their human capital and preferences--as a better explanation of labor market problems that concern, or ought to concern, policy makers. More fundamentally, however, opponents in the debate disagree on basic assumptions about how labor markets work. Orthodox neoclassical economists, who generally oppose regulation, believe that workers are matched with jobs in accordance with a combination of their human capital, preferences, and employers' needs. Reform-minded "strong segmentationists," by contrast, argue that contingent jobs tend to be dead-end "secondary" jobs, often involuntary and alienating. Finding both orthodox and strong segmentationist accounts incomplete, I turn to "New Keynesian" explanations of labor markets, originally developed to explain equilibrium unemployment. I argue that this third approach can provide important insights on contingent employment that have largely eluded contemporary debates on contingency. Finally, I discuss the implications of New Keynesian accounts for policy reform, identifying directions for further research.
JEL Classification: J23
Suggested Citation: Suggested Citation