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Work-Life Balance, Management Practices and Productivity

In: International Differences in the Business Practices and Productivity of Firms

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Author Info

  • Nick Bloom
  • Tobias Kretschmer
  • John Van Reenan

Abstract

Do "Anglo-Saxon" management practices generate higher productivity only at the expense of lousy work-life balance (WLB) for workers? Many critics of "neo-libéralisme sauvage" have argued that increased competition from globalisation is damaging employees' quality of life. Others have argued the opposite that improving work-life balance is actually a competitive tool that companies can use to raise productivity. We try to shed some empirical light on these issues using an innovative survey tool to collect new data on management and work-life balance practices from 732 medium sized manufacturing firms in the US, France, Germany and the UK. First, we show that our measure of work-life balance is a useful summary of a range of policies in the firm - family-friendly policies, flexible working, shorter hours, more holidays, subsidised childcare, etc. We show that this worklife balance measure is significantly associated with better management. Firms in environments that are more competitive and/or who are more productive, however, do not have significantly worse work-life balance for their workers. These findings are inconsistent with the view that competition, globalisation and "Anglo-Saxon" management practices are intrinsically bad for the work-life balance of workers. On the other hand, neither are these findings supportive of the optimistic "winwin" view that work-life balance improves productivity in its own right. Rather we find support for a "hybrid" theory that work-life balance is a choice for managers that is compatible with low or high productivity.

(This abstract was borrowed from another version of this item.)

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This chapter was published in:

  • Richard Freeman & Kathryn Shaw, 2009. "International Differences in the Business Practices and Productivity of Firms," NBER Books, National Bureau of Economic Research, Inc, number free07-1, October.
    This item is provided by National Bureau of Economic Research, Inc in its series NBER Chapters with number 0441.

    Handle: RePEc:nbr:nberch:0441

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    References

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    1. S Black & L Lynch, 1997. "How to Compete: The Impact of Workplace Practices and Information Technology on Productivity," CEP Discussion Papers dp0376, Centre for Economic Performance, LSE.
    2. Charles F. Manski, 2004. "Measuring Expectations," Econometrica, Econometric Society, vol. 72(5), pages 1329-1376, 09.
    3. Chad Syverson, 2001. "Market Structure and Productivity: A Concrete Example," Working Papers 01-06, Center for Economic Studies, U.S. Census Bureau.
    4. Philippe Aghion & Nicholas Bloom & Richard Blundell & Rachel Griffith & Peter Howitt, 2002. "Competition and innovation: an inverted U relationship," IFS Working Papers W02/04, Institute for Fiscal Studies.
    5. Nick Bloom & John Van Reenen, 2006. "Measuring and explaining management practices across firms and countries," LSE Research Online Documents on Economics 733, London School of Economics and Political Science, LSE Library.
    6. Casey Ichniowski & Kathryn Shaw, 2004. "Using "Insider Econometrics" to Study Productivity," American Economic Review, American Economic Association, vol. 94(2), pages 217-223, May.
    7. Donald Siegel, 1997. "The Impact Of Computers On Manufacturing Productivity Growth: A Multiple-Indicators, Multiple-Causes Approach," The Review of Economics and Statistics, MIT Press, vol. 79(1), pages 68-78, February.
    8. Nickell, S.J., 1993. "Competition and Crporate Performance," Economics Series Working Papers 99155, University of Oxford, Department of Economics.
    9. Matthew Gray & Jacqueline Tudball, 2004. "Family-friendly work practices: differences within and between workplaces," Labor and Demography 0405003, EconWPA.
    10. Stewart, Mark B, 1990. "Union Wage Differentials, Product Market Influences and the Division of Rents," Economic Journal, Royal Economic Society, vol. 100(403), pages 1122-37, December.
    11. Timothy F. Bresnahan & Erik Brynjolfsson & Lorin M. Hitt, 1999. "Information Technology, Workplace Organization and the Demand for Skilled Labor: Firm-Level Evidence," NBER Working Papers 7136, National Bureau of Economic Research, Inc.
    12. Helen Gray, 2002. "Family-Friendly Working: What a Performance! An Analysis of the Relationship Between the Availability of Family-Friendly Policies and Establishment Performance," CEP Discussion Papers dp0529, Centre for Economic Performance, LSE.
    13. Chad Syverson, 2003. "Product Substitutability and Productivity Dispersion," NBER Working Papers 10049, National Bureau of Economic Research, Inc.
    14. Nick Bloom & Christos Genakos & Ralf Martin & Raffaella Sadun, 2008. "Modern Management: Good for the Environment or Just Hot Air?," CEP Discussion Papers dp0891, Centre for Economic Performance, LSE.
    15. Eric J. Bartelsman & Wayne Gray, 1996. "The NBER Manufacturing Productivity Database," NBER Technical Working Papers 0205, National Bureau of Economic Research, Inc.
    16. Ichniowski, Casey & Shaw, Kathryn & Prennushi, Giovanna, 1997. "The Effects of Human Resource Management Practices on Productivity: A Study of Steel Finishing Lines," American Economic Review, American Economic Association, vol. 87(3), pages 291-313, June.
    17. John Budd & Karen Mumford, . "Family-Friendly Work Practices in Britain: Availability and Awareness," Discussion Papers 02/01, Department of Economics, University of York.
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    Cited by:
    1. John Van Reenen, 2010. "Does Competition Raise Productivity Through Improving Management Quality?," CEP Discussion Papers dp1036, Centre for Economic Performance, LSE.
    2. Edmans, Alex, 2011. "Does the stock market fully value intangibles? Employee satisfaction and equity prices," Journal of Financial Economics, Elsevier, vol. 101(3), pages 621-640, September.
    3. Nicholas Bloom & John Van Reenen, 2010. "Human Resource Management and Productivity," NBER Working Papers 16019, National Bureau of Economic Research, Inc.
    4. Nicholas Bloom & Raffaella Sadun & John Van Reenen, 2010. "Recent Advances in the Empirics of Organizational Economics," Annual Review of Economics, Annual Reviews, vol. 2(1), pages 105-137, 09.
    5. Emilia Del Bono & Daniela Vuri, 2008. "Job Mobility and the Gender Wage Gap in Italy," CEIS Research Paper 130, Tor Vergata University, CEIS, revised 06 Nov 2008.
    6. MORIKAWA Masayuki, 2010. "Insecurity of Employment and Work-Life Balance: From the viewpoint of compensating wage differentials," Discussion papers 10052, Research Institute of Economy, Trade and Industry (RIETI).
    7. YAMAMOTO Isamu & MATSUURA Toshiyuki, 2012. "Effect of Work-Life Balance Practices on Firm Productivity: Evidence from Japanese firm-level panel data," Discussion papers 12079, Research Institute of Economy, Trade and Industry (RIETI).

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