External Churning and Internal Flexibility: Evidence on the Functional Flexibility and Core-Periphery Hypotheses

35 Pages Posted: 23 Mar 2004  

Peter Cappelli

University of Pennsylvania Wharton School - Center for Human Resources; National Bureau of Economic Research (NBER); University of Pennsylvania - Management Department

David Neumark

University of California, Irvine - Department of Economics; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

Abstract

Functionally flexible systems for organizing work may reduce job instability and insecurity by reducing employers' reliance on job cuts or contingent work to respond to changes in their environments. Related arguments hypothesize that contingent work allows firms to adjust labor while "buffering" their core of permanent workers from job instability. We find evidence that internally flexible work systems are associated with reduced involuntary and voluntary turnover in manufacturing but that contingent work and involuntary turnover of the permanent workforce are positively related regardless of sector, in contrast to the prediction of the core-periphery hypothesis.

Suggested Citation

Cappelli, Peter and Neumark, David, External Churning and Internal Flexibility: Evidence on the Functional Flexibility and Core-Periphery Hypotheses. Industrial Relations: A Journal of Economy and Society, Vol. 43, No. 1, pp. 148-182, January 2004. Available at SSRN: https://ssrn.com/abstract=513192

Peter Cappelli

University of Pennsylvania Wharton School - Center for Human Resources ( email )

3733 Spruce Street, Vance Hall
Philadelphia, PA 19104-6358
United States

HOME PAGE: http://www.wharton.upenn.edu/faculty/cappelli.html

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

University of Pennsylvania - Management Department ( email )

The Wharton School
Philadelphia, PA 19104-6370
United States

David Neumark (Contact Author)

University of California, Irvine - Department of Economics ( email )

3151 Social Science Plaza
Irvine, CA 92697-5100
United States
949-824-8496 (Phone)
949-824-2182 (Fax)

HOME PAGE: http://www.socsci.uci.edu/~dneumark/

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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