Temping fates in Spain: hours and employment in a dual labor market during the Great Recession and COVID-19

We investigate the behavior of aggregate hours supplied by workers in permanent (open-ended) contracts and temporary contracts, distinguishing changes in employment (extensive margin) and hours per worker (intensive margin). We focus on the differences between the Great Recession and the start of the COVID-19 Recession. In the Great Recession, the loss in aggregate hours is largely accounted for by employment losses (hours per worker did not adjust) and initially mainly by workers in temporary contracts. In contrast, in the early stages of the COVID-19 Recession, approximately sixty percent of the drop in aggregate hours is accounted for by permanent workers that do not only adjust hours per worker (beyond average) but also face employment losses—accounting for one-third of the total employment losses in the economy. We argue that our comparison across recessions allows for a more general discussion on the impact of adjustment frictions in the dual labor market and the effects policy, in particular the short-time work policy (ERTE) in Spain.

Uneven Use of Remote Work to Prevent the Spread of COVID-19 in South Korea's Stratified Labor Market

Background: This research analyzed whether South Korean companies adopted remote work during the COVID-19 pandemic by focusing on the dual labor market structure comprising of primary sector (large corporations) and secondary sector [small and medium enterprises (SMEs)]. Companies in the dual labor market were classified based on firm size.Methods: We used August supplementary data from the Economically Active Population Survey covering 2017–2020 provided by Statistics Korea. In this empirical study, a Linear Probability Model was used to analyze the probability that employees would work for companies that introduced remote work since COVID-19 depending on the size of the company.Results: This study showed three main results. First, unlike other flexible work systems, the use of remote work has increased rapidly since COVID-19. Second, the larger the size of the company, the higher the probability that employees would work for companies that introduced remote work after COVID-19. Third, according to the analysis by industry, the difference in remote work utilization between large corporations and SMEs was relatively small because of a similar working method in manufacturing.Conclusion: Results of this study suggested that polarization within the dual labor market structure also spilled over to adoption of remote work, which was initially introduced to prevent the spread of the pandemic. This study examined the system and factors of labor-management relations contributing to such polarization and presented policy directions for the current labor market structure.

Dual-Labor Market and Unemployment Compensation

This paper discusses the impact of unemployment compensation on the employment and wages of regular and non-regular labor in a dual-labor market. The model in this paper assumes an effective demand constraint and an imperfectly competitive market. The results obtained are as follows. An increase in unemployment compensation increases the wages of regular labor to maintain its productivity. However, this temporarily decreases the employment of regular labor, so that the productivity and wages of non-regular labor decrease. The result is an increase in the relative wage rate of regular labor and the relative amount of non-regular labor employed. This result is independent of any economic regime. In terms of the impact on employment volume, the existence of two regimes, one wage-driven and one profit-driven, is confirmed. However, the effect on employment is weaker if unemployment compensation is financed by taxing profits.