Careers and Contingency

Disagreement among legal scholars over the phenomenon of “contingent employment”—work having limited hours, duration, or security—has led to disparate prescriptions for legal reform. For some, the best solution would be to either leave the market alone, or eliminate existing regulations that drive employers to create contingent jobs. Others believe current regulations do not go far enough and advocate reforms ranging from expanding mandatory benefits and protections to facilitating collective bargaining among contingent workers in order to restore such benefits as long-term security, training, and career advancement. The debate about law reform has centered partly on disputes over the size, growth, and characteristics of the contingency phenomenon. Workers variously described as “contingent” are so eclectic as to render broad-brush claims on both sides of the debate misleading. As an alternative, Professor Gillian Lester offers the concept of underemployment—a failure of the market to match workers with jobs that fully exploit their human capital and preferences—as a superior explanation of the labor market problems that ought to concern policy makers. More fundamentally, however, opponents in the debate disagree over how labor markets work. Orthodox neoclassical economists, who generally oppose regulation, believe workers are matched with jobs in accordance with their human capital, preferences, and employers’ needs. Reform-minded “strong segmentationists,” by contrast, argue that contingent jobs tend to be dead-end “secondary” jobs, often involuntary and alienating. Finding both orthodox and strong segmentationist accounts incomplete, Professor Lester turns to “New Keynesian” explanations of labor markets, originally developed to explain equilibrium unemployment. She argues that this third approach provides important insights into contingent employment that have largely eluded contemporary debates on contingency. Finally, she discusses the policy implications of New Keynesian accounts, identifying directions for further research.