Benefits of Flexible Labor in Firms: Short-Term and Part-Time Work

This paper examines the reasons why firms use flexible labor, defined here in terms of short spells (of less than one year) and part-time labor. Departing from Leclair and Roux (2005), it emphasizes the positive correlation in manufacturing, trade, and service industries between the use of short-spell and part-time labor. We show that the hourly productivity of short-spell labor is higher than that of other employees with similar tenure, and that part-time hourly productivity is higher than full-time productivity, especially in services. Contributions to firm’s wage costs for each type of labor are estimated, though the results are not conclusive.