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The Part-Time Wage Penalty: A Career Perspective

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Author Info
Russo, Giovanni (Utrecht University)
Hassink, Wolter () (Utrecht University and IZA Bonn)
Abstract

Part-time employment has become an extremely popular work arrangement in the Netherlands because it renders employment compatible with non-work activities. We posit that there may be a downside to part-time employment, which is related to its negative effects on workers’ career. This may be the case when firms use promotions to stimulate skill acquisition and human capital accumulation or when they base their work incentive schemes on performance measures that are affected by the number of hours worked or when they screen workers on the basis of the number of hours worked. Because promotions are an important source of wage growth, the low incidence of promotion among part-time workers may contribute to the emergence of the part-time wage penalty (i.e., the wage difference between a part-time worker and an otherwise equal full-time worker) in due time. Consistent with this view, we find that (male and female) workers in part-time jobs are characterized by a lower incidence of promotion relative to workers in full-time jobs and that promotions account for a wage growth of eight log points. Moreover, we find that the part-time wage penalty does not arise at the onset of a career as young workers join the labor market but that it tends to develop over time as labor market experience and the effect of missed promotions cumulate.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1468.

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Length: 26 pages
Date of creation: Jan 2005
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Handle: RePEc:iza:izadps:dp1468

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Related research
Keywords: wages; wage gap; part-time employment; promotions;

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Find related papers by JEL classification:
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Leslie I. Boden & Monica Galizzi, 2003. "Income Losses of Women and Men Injured at Work," Journal of Human Resources, University of Wisconsin Press, vol. 38(3). [Downloadable!] (restricted)
  2. Euwals, Rob & Hogerbrugge, Maurice, 2004. "Explaining the Growth of Part-Time Employment: Factors of Supply and Demand," IZA Discussion Papers 1124, Institute for the Study of Labor (IZA). [Downloadable!]
  3. Booth, Alison L. & Francesconi, Marco & Frank, Jeff, 2003. "A sticky floors model of promotion, pay, and gender," European Economic Review, Elsevier, vol. 47(2), pages 295-322, April. [Downloadable!] (restricted)
  4. Mundlak, Yair, 1978. "On the Pooling of Time Series and Cross Section Data," Econometrica, Econometric Society, vol. 46(1), pages 69-85, January. [Downloadable!] (restricted)
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  6. Light, Audrey & Ureta, Manuelita, 1995. "Early-Career Work Experience and Gender Wage Differentials," Journal of Labor Economics, University of Chicago Press, vol. 13(1), pages 121-54, January. [Downloadable!] (restricted)
  7. McCue, Kristin, 1996. "Promotions and Wage Growth," Journal of Labor Economics, University of Chicago Press, vol. 14(2), pages 175-209, April. [Downloadable!] (restricted)
  8. Jones, David R & Makepeace, Gerald H, 1996. "Equal Worth, Equal Opportunities: Pay and Promotion in an Internal Labour Market," Economic Journal, Royal Economic Society, vol. 106(435), pages 401-09, March. [Downloadable!] (restricted)
  9. Rob Euwals & Maurice Hogerbrugge, 2004. "Explaining the growth of part-time employment: factors of supply and demand," CPB Discussion Papers 31, CPB Netherlands Bureau for Economic Policy Analysis. [Downloadable!]
  10. Lundberg, Shelly J & Startz, Richard, 1983. "Private Discrimination and Social Intervention in Competitive Labor Markets," American Economic Review, American Economic Association, vol. 73(3), pages 340-47, June. [Downloadable!] (restricted)
    Other versions:
  11. Lois Joy, 2003. "Salaries of recent male and female college graduates: Educational and labor market effects," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 56(4), pages 606-621, July. [Downloadable!] (restricted)
  12. Gibbons, Robert & Waldman, Michael, 1999. "Careers in organizations: Theory and evidence," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 36, pages 2373-2437 Elsevier. [Downloadable!] (restricted)
  13. Alan Manning & Helen Robinson, 2004. "Something in the way she moves: a fresh look at an old gap," Oxford Economic Papers, Oxford University Press, vol. 56(2), pages 169-188, April. [Downloadable!] (restricted)
    Other versions:
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Lutz Kaiser, 2005. "Gender-Job Satisfaction Differences across Europe: An Indicator for Labor Market Modernization," IZA Discussion Papers 1876, Institute for the Study of Labor (IZA). [Downloadable!]
  2. Cecile Wetzels, 2007. "First Time Parents’ Paid Work Patterns in Amsterdam: Father’s Part-Time Work, Family’s Immigrant Background and Mother’s Work for Pay When the Infant Is Very Young," IZA Discussion Papers 2853, Institute for the Study of Labor (IZA). [Downloadable!]
  3. Síle O’Dorchai & Robert Plasman & François Rycx, 2007. "The Part-Time Wage Penalty in European Countries: How Large Is It for Men?," IZA Discussion Papers 2591, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  4. Giovanni Russo & Wolter Hassink, 2008. "The Part-Time Wage Gap: a Career Perspective," De Economist, Springer, vol. 156(2), pages 145-174, June. [Downloadable!] (restricted)
  5. Lutz C. Kaiser, 2005. "Gender-Job Satisfaction Differences across Europe: An Indicator for Labor Market Modernization," Discussion Papers of DIW Berlin 537, DIW Berlin, German Institute for Economic Research. [Downloadable!]
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