Premium
“BUMPING”, LAYOFFS, AND WORKSHARING
Author(s) -
KATO TAKAO
Publication year - 1986
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/j.1465-7295.1986.tb01840.x
Subject(s) - bumping , labour economics , economics , labor demand , business , wage , engineering , mechanical engineering
This paper deals with an interesting but often‐neglected labor practice prevalent in large North American firms with well‐developed internal labor markets. Large North American firms typically respond to a decline in demand for their products by first reducing the number of hours worked (or worksharing). As the demand continues to fall, however, they begin to make skilled workers “bump onto” unskilled jobs, displacing unskilled workers. Skilled workers are laid off only after a considerable number have bumped. I develop an implicit contract model and explain the practice.