The Implicit Costs and Benefits of Family Friendly Work Practices
AbstractThis paper posits that the provision of family friendly practices is, on balance, costly to firms and valuable to workers. As a consequence, we anticipate the emergence of a hedonic equilibrium in which workers provided with such practices face an implicit reduction in their earnings. Using WERS98 linked employer-employee data, we show that the ability to confirm this compensating wage differential depends critically on an appropriate treatment model designed to purge typical estimates of the income effect. We find that family friendly jobs may be associated with as much as a 20 percent reduction in earnings. Our estimates can be used to inform impact assessments of new UK legislation extending family friendly practices.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1581.
Length: 42 pages
Date of creation: May 2005
Date of revision:
Publication status: published in: Oxford Economic Papers, 2007, 59 (2), 275-300
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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
- J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
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