MURAL - Maynooth University Research Archive Library



    Heigh Ho, Heigh Ho: flexible labor contracts with real option characteristics


    Byrne, Julie and Pecchenino, Rowena A. (2019) Heigh Ho, Heigh Ho: flexible labor contracts with real option characteristics. Business Economics, 54. pp. 25-34. ISSN 0007-666X

    Abstract

    What is the strategic value of flexible labor contracts to workers? To answer this question, we examine workers’ labor supply decisions when choosing among alternative work arrangements ranging from permanent and pensionable to fixed-term, shift work, zero-hour, and on-call to gigs. We then introduce the concept of real options as a framework in which to analyze contract valuation from the workers’ perspective. For a non-standard employment contract to have real option value, the contract must both lead to future choices and enable advantageous access to future opportunities. Using case studies from a diverse set of industries and guided by the real options framework, we examine when contract flexibility contains valuable real option characteristics for the utility maximizing worker, or the profit maximizing firm, or, surprisingly, both.
    Item Type: Article
    Keywords: Alternative work arrangements; Flexibility; Gig economy; Real options; Standard labor contract;
    Academic Unit: Faculty of Social Sciences > Economics, Finance and Accounting
    Item ID: 19569
    Identification Number: 10.1057/s11369-018-00106-3
    Depositing User: Prof. Rowena Pecchenino
    Date Deposited: 11 Mar 2025 15:33
    Journal or Publication Title: Business Economics
    Publisher: Palgrave Macmillan
    Refereed: Yes
    Related URLs:
    Use Licence: This item is available under a Creative Commons Attribution Non Commercial Share Alike Licence (CC BY-NC-SA). Details of this licence are available here

    Downloads

    Downloads per month over past year

    Origin of downloads

    Altmetric Badge

    Repository Staff Only (login required)

    Item control page
    Item control page