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CEP discussion paper
The 'Network Economy' and Models of the Employment Contract: Psychological, Economic and Legal
David Marsden
February 2004
Paper No' CEPDP0620:
Full Paper (pdf)

JEL Classification: M55; K31; J44; J53

Tags: network economy; labor contracting; labor law; labor management relations

The emergence of the so-called ¿network economy¿ and the development of project-based work pose a fundamental challenge to established methods of regulating the employment relationship. There appears to be an unsatisfied demand for its greater use, especially among employers, and it is argued that this may be blocked by the lack of suitable contractual forms, such as those that have underpinned the established open-ended employment relationship. Project-based work seeks to retain some of the open-ended flexibility of the standard employment relationship in relation to its task content but not its duration. The paper argues the success of the standard employment relationship owes much to the articulation of its psychological, economic/incentive, and legal aspects. As yet, this appears to be lacking for more transient forms of relationship.