The Impact of Wage and Labour Flexibility on Employers and Employees

M. Weber^1, , L.D. Gonen² and U. Spiegel³

¹Ono Academic College, Faculty of Business Administration and Bar-Ilan University Department of Management, Israel

²Department of Economics and Business Administration, Ariel University, Israel

³Chair Department of Management, Bar-Ilan University, Israel and Visiting Professor, Department of Economics, University of Pennsylvania, USA and a Professor in Zefat College, Israel

Cite this paper

M. Weber, L.D. Gonen and U. Spiegel. The Impact of Wage and Labour Flexibility on Employers and Employees. Journal of Business and Management Sciences. 2017; 5(4):108-119. doi: 10.12691/JBMS-5-4-1

Abstract

labour market flexibility, working time arrangements and work-life balance are important issues on the political agenda of many societies. The present paper captures the trade-off between the interests of employers and employees by adjusting working hours to the employee availability constraints. A theoretical model is developed in order to determine the ideal wage gap between full-time and part-time employees. The paper proposes a method of computing a "fair" wage rate for part-time employees that is driven by purely financial considerations which ensure that neither employers nor employees are penalized by the employment arrangement. The ideal wage that is identified can serve as a benchmark for a "justifiable" wage gap (also referred to as "wage differences") between part-time and full-time employees. Policymakers can rely upon the method presented for computing a "fair" wage rate for part-time employees. Another dimension of labour flexibility in the field of Human Resource Management is discussed in order to define an appropriate wage gap between part-time and full-time employees.

Keywords

wage difference, wage discrimination, employment cost, work productivity, quasi-fixed labour costs

Copyright

This work is licensed under a Creative Commons Attribution 4.0 International License. To view a copy of this license, visit http://creativecommons.org/licenses/by/4.0/

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