Work Allocation Forms: Substitution between Full-time, Part-time and Contracted Labour in the Creative
Industries
Ralitza Dobreva and Gregory John Lee
African Microeconomic Research Umbrella (AMERU) School of Economic and Business Sciences
University of the Witwatersrand
TIPS Annual Forum 2008
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Introduction and Background
• Increasing importance of part-time and temporary work
arrangements:
• Internationally
(Kalleberg, 2000; Booth et al, 2002;
Peck and Theodore, 2007)
• Locally
About 20.3% of those employed in SA are in non-
permanent work arrangements
(estimated on the basis of 1999 OHS by Bhorat et al,
2002).
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Introduction and Background
• Fast facts for developed economies in 2005:
(permanent and temporary part-time work)• the lowest proportions of part-time labour (below 5%) are found
in the Czech Republic, Hungary and Slovakia.
• Australia, Japan, the Netherlands and Switzerland have the
highest shares of part-time employment: above 25%.
• The Netherlands has by far the highest rate of part-time
employment – above 35% (ILO, 2007).
• Most research explores macro-level effects (e.g.
productivity) or labour supply side (profiles / careers) • But little research on firms’ demand for different forms of
alternative work arrangements • Permanent part-time vs. temporary (contract) employment
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Introduction and Background• Paper arises out of a broad study on the creative industries in
Gauteng, commissioned by the Gauteng Department of Sports, Arts,
Culture and Recreation, in collaboration with the British Council
(GDSACR, 2008).
• Creative Industries?
• Firms, whose activities “have their roots in individual creativity,
skill and talent and which have a potential for job creation through
the generation and exploitation of intellectual property”
(DCMS, 2001)
• In GDSACR study, these include visual arts, performing arts,
cultural tourism, multimedia, music, craft, audiovisual, cultural
heritage, publishing, design, fashion and other.
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Introduction and Background
• Purpose of the paper:
• to explore the drivers of demand for non-standard forms of
employment,
• specifically differentiating between permanent part-time and
temporary (contract) workers
• in the context of the creative industries in Gauteng.
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Theoretical Perspectives on Alternative Employment Arrangements
• The firm’s approach to decision about the type of contracts
offered to workers has to do with the assumption that that the
termination of permanent employment contracts is costly
• Hence, temporary employment contracts are used as “buffer
stock” to complement permanent employment:
• expand temporary employment during good times
• terminate temporary employment during bad times
• retain core of permanent employees
• Garibaldi, 2006
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Theoretical Perspectives on Alternative Employment Arrangements
“Buffer stock” theory does not explain firm’s demand for part-time vs. temporary (contract) workers
Other theories to complement “buffer stock” model
– transaction cost economics - aspects of the transaction such as frequency, specificity, opportunism and uncertainty will dictate the extent of externalisation
– resource-based theory - focuses on the extent to which the resource drives competitive advantage.
Propositions
Proposition 1: A large degree of financial change will generally lead to greater use of full-time or contract workers but fewer part-time workers
Proposition 2: The effect in Proposition 1 will be less prevalent for older firms
Proposition 3: Employment changes in times of financial growth will tend the firm towards a) more full-time employment, and b) more use of part-time work than contract labour as a complement to permanent employment
Proposition 4: Employment changes in times of financial decline will tend the firm towards a) more full-time employment, and b) more use of part-time work than contract labour as a complement to permanent
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Results
Across the entire sample:
the average share of full-time/permanent workers is 76%
(SD = 34%),
average part-time usage is 12%
(SD = 25%),
contract labour comprises some 11%
(SD = 26%)
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Figure 1: Alternative employment across varied financial and employment conditions
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0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Shrinking Same Growing
Shrinking Lot
Shrinking Bit
Same
Growing bit
Growing lot
Average of %NonFT
TOChg
ChangeEml
Table 1: Disaggregated employment usage across changes in turnover and employment
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Change in TurnoverChange in Employment
Grand TotalShrinking Lot Shrinking Bit Same Growing bit Growing lot
Shrinking
%Permanent 60% 14% 59% 60% 80% 57%
% Part-time 0% 26% 17% 13% 20% 16%
%Contract 40% 60% 24% 27% 0% 27%
Same
%Permanent 68% 83% 83% 89% 82% 84%
% Part-time 16% 11% 10% 7% 13% 10%
%Contract 16% 6% 7% 5% 5% 6%
Growing
%Permanent 20% 73% 61% 65% 58% 61%
% Part-time 60% 16% 21% 7% 15% 18%
%Contract 20% 11% 17% 28% 27% 20%
Total %Permanent 64% 76% 76% 83% 73% 76%
Total %Part-time 17% 14% 13% 7% 14% 12%
Total %Contract 19% 11% 11% 10% 13% 11%
Figure 2: Disaggregated employment usage over varied financial and employment conditions
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0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Average of%Perm
Average of%Part
Average of%Contract
Average of%Perm
Average of%Part
Average of%Contract
Average of%Perm
Average of%Part
Average of%Contract
Shrinking Same Growing
Shrinking Lot
Shrinking Bit
Same
Growing bit
Growing lot
TOChg Data
ChangeEml
Table 2: Disaggregated employment forms by turnover, employment and age of firm
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Change in Turnover
Age of firmEmployment
forms
Change in Employment
Grand TotalShrinking Same Growing
Not growing
Experienced
% Permanent 81% 77% 91% 80%
%Part-time 8% 13% 6% 11%
%Contract 11% 10% 4% 8%
Inexperienced
% Permanent 66% 89% 87% 86%
% Part-time 19% 6% 8% 8%
%Contract 14% 5% 4% 6%
Growing
Experienced
% Permanent 59% 46% 58%
% Part-time 29% 46% 30%
%Contract 12% 8% 12%
Inexperienced
%Permanent 20% 73% 59% 63%
% Part-time 60% 0% 20% 13%
%Contract 20% 27% 21% 24%
Total %Permanent 69% 78% 86% 80%
Total Ave. of %Part-time 17% 13% 9% 12%
Total Average of %Contract 14% 9% 5% 8%
Figure 3: Employment forms across capital intensity and total workforce
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0%
20%
40%
60%
80%
100%
120%
Average of%Perm
Average of%Part
Average of%Contract
Average of%Perm
Average of%Part
Average of%Contract
Average of%Perm
Average of%Part
Average of%Contract
Low Medium High
Low
Medium
High
Capital intensity Data
Empl size
Table 3: Effect of capital intensity and firm size
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Capital intensityEmployment
forms
Total workforce size
Grand TotalLow Medium High
Low
%Permanent 80% 68% 75% 76%
%Part-time 17% 23% 11% 15%
%Contract 3% 9% 14% 9%
Medium
%Permanent 90% 71% 66% 78%
%Part-time 6% 10% 10% 8%
%Contract 3% 18% 24% 14%
High
%Permanent 96% 89% 65% 76%
%Part-time 4% 8% 15% 11%
%Contract 0% 3% 20% 12%
Total %Permanent 87% 75% 69% 76%
Total %Part-time 10% 16% 13% 12%
Total %Contract 2% 9% 18% 11%
Figure 4: Capital intensity and total firm (workforce) size
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0%
20%
40%
60%
80%
100%
120%
Average of%Perm
Average of%Part
Average of%Contract
Average of%Perm
Average of%Part
Average of%Contract
Average of%Perm
Average of%Part
Average of%Contract
Low Medium High
Low
Medium
High
Capital intensity Data
Empl size
Discussion and conclusions
Generally, financial change leads to substitution into buffer stock in different ways
In addition, a reduction in the workforce is associated with greater part-time and contracting work.
Hence, uncertainty and change do indeed drive use of “buffer stock” employment.
Different patterns emerge, depending on the extent of workforce reduction, the associated financial state, and the age of the firm.
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Discussion and conclusions (ctd)
There are often large differences between firms that do smaller (<10%) as opposed to larger (>10%) reductions in employment.
Smaller reductions in workforce size when associated with financial downturns tend firms towards contract labour. Large reductions in workforce but growth in financial turnover are associated with large substitutions into part-time employment, and this effect is associated with younger firms.
Large differences in employment trends (volatility) are associated with younger firms, which make more use of contract labour.
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Discussion and conclusions (ctd)
High levels of full-time labour are linked to financial downturns but where firms (especially older firms) are expanding their workforces. Full-time employment is higher with greater capital intensity but smaller absolute workforce size. High levels of full-time employment
are associated with financial downturns but where firms (esp. older firms) are expanding their workforces.
Contract labour is linked especially to times of financial instability. Higher capital intensity and larger workforces are also linked to greater use of contracting.
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Limitations
Cross-sectional data Lack of direct measures of environmental and transaction characteristics
Future research
Panel data Comparison of trends with other industries / broader economy
Thank you!
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