The Effects of Contingent Employment on Innovation and Entrepreneurship
67 Pages Posted: 15 Nov 2019 Last revised: 10 Feb 2020
Date Written: November 6, 2019
Using novel population-level data, this paper finds that job insecurity faced by contingent workforce impedes innovation and entrepreneurship. It examines marginally contingent workers in core functions, who may innovate as their secured colleagues undertaking the same tasks. Innovation increases for firms that secure the unsecured workers in the absence of managerial innovation input. Startups and jobs are created in industries and cities where security provision elevates within-firm innovative activities. This study exploits a Korean Supreme Court ruling against the contingent employment in core functions as a source of exogenous variation in a firm's choice between secured and unsecured labor.
Keywords: contingent worker, job security, innovation incentive, and entrepreneurship
JEL Classification: J41, J46, L26, O31
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