Why is flexible employment increasing?

Firms have increased their reliance on flexible, or temporary, employment. Some of this increase is a normal market response to technological and demographic trends largely beyond the control of public policy But the trend toward flexible employment is also explained by increased government regulation of labor markets. This regulation has increased the cost of employing permanent workers relative to the cost of employing temporary workers. Of primary importance has been the substitution of regulatory restrictions on hiring and firing for the common law doctrine of employment at will.