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The Part-Time Wage Penalty: A Career Perspective

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  • Russo, Giovanni

    ()
    (European Centre for the Development of Vocational Training (Cedefop))

  • Hassink, Wolter

    ()
    (Utrecht University)

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    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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    Bibliographic Info

    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
    Date of revision:
    Publication status: published as "The Part-Time Wage Gap: a Career Perspective" in: De Economist, 2008, 156 (2), 145-174
    Handle: RePEc:iza:izadps:dp1468

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

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    References

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    1. Rob Euwals & Maurice Hogerbrugge, 2004. "Explaining the growth of part-time employment; factors of supply and demand," CPB Discussion Paper 31, CPB Netherlands Bureau for Economic Policy Analysis.
    2. 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.
    3. McCue, Kristin, 1996. "Promotions and Wage Growth," Journal of Labor Economics, University of Chicago Press, vol. 14(2), pages 175-209, April.
    4. 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).
    5. 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.
    6. 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).
    7. Kostas G. Mavromaras & Helmut Rudolph, 1997. "Wage Discrimination in the Reemployment Process," Journal of Human Resources, University of Wisconsin Press, vol. 32(4), pages 812-860.
    8. Alan Manning & Helen Robinson, 1998. "Something in the way She Movcs: A Fresh Look at an Old Gap," CEP Discussion Papers dp0389, Centre for Economic Performance, LSE.
    9. Freeman, Richard B., 1998. "War of the models: Which labour market institutions for the 21st century?1," Labour Economics, Elsevier, vol. 5(1), pages 1-24, March.
    10. Mundlak, Yair, 1978. "On the Pooling of Time Series and Cross Section Data," Econometrica, Econometric Society, vol. 46(1), pages 69-85, January.
    11. 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.
    12. 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.
    13. Lois Joy, 2003. "Salaries of recent male and female college graduates: Educational and labor market effects," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 56(4), pages 606-621, July.
    14. 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.
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    Cited by:
    1. Sile Padraigin O'Dorchai & Robert Plasman & François Rycx, 2007. "The part-time wage penalty in European countries: how large is it for men?," ULB Institutional Repository 2013/8555, ULB -- Universite Libre de Bruxelles.
    2. 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.
    3. Giovanni Russo & Wolter Hassink, 2008. "The Part-Time Wage Gap: a Career Perspective," De Economist, Springer, vol. 156(2), pages 145-174, June.
    4. Wetzels, Cécile, 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).
    5. Kaiser, Lutz C., 2005. "Gender-Job Satisfaction Differences across Europe: An Indicator for Labor Market Modernization," IZA Discussion Papers 1876, Institute for the Study of Labor (IZA).

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