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The Implicit Costs and Benefits of Family Friendly Work Practices

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Author Info
John S. Heywood () (University of Wisconsin-Milwaukee)
W.S. Siebert (University of Birmingham Business School and IZA Bonn)
Xiangdong Wei (Lingnan University)

Additional information is available for the following registered author(s):

Abstract

This 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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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1581.

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Length: 42 pages
Date of creation: May 2005
Date of revision:
Handle: RePEc:iza:izadps:dp1581

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Related research
Keywords: family friendly work practices; hedonic equilibrium; compensating wage differential; legislative impact assessment;

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; Private Pensions

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. Keith A. Bender & Susan M. Donohue & John S. Heywood, 2005. "Job satisfaction and gender segregation," Oxford Economic Papers, Oxford University Press, vol. 57(3), pages 479-496, July. [Downloadable!] (restricted)
  2. Helena Skyt Nielsen & Marianne Simonsen & Mette Verner, 2004. "Does the Gap in Family-friendly Policies Drive the Family Gap?," Scandinavian Journal of Economics, Blackwell Publishing, vol. 106(4), pages 721-744, December. [Downloadable!] (restricted)
    Other versions:
  3. Cynthia L. Gramm & John F. Schnell, 2001. "The Use of flexible staffing arrangements in core production jobs," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 54(2), pages 245-258, January.
  4. John W. Budd & Karen Mumford, 2004. "Trade unions and family-friendly policies in Britain," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 57(2), pages 204-222, January. [Downloadable!] (restricted)
    Other versions:
  5. Deardorff, Alan V & Stafford, Frank P, 1976. "Compensation of Cooperating Factors," Econometrica, Econometric Society, vol. 44(4), pages 671-84, July. [Downloadable!] (restricted)
  6. Yoshio Higuchi & Jane Waldfogel & Masahiro Abe, 1999. "Family leave policies and women's retention after childbirth: Evidence from the United States, Britain, and Japan," Journal of Population Economics, Springer, vol. 12(4), pages 523-545. [Downloadable!] (restricted)
  7. Duncan, Greg J & Stafford, Frank P, 1980. "Do Union Members Receive Compensating Wage Differentials?," American Economic Review, American Economic Association, vol. 70(3), pages 355-71, June. [Downloadable!] (restricted)
  8. Heckman, James J, 1978. "Dummy Endogenous Variables in a Simultaneous Equation System," Econometrica, Econometric Society, vol. 46(4), pages 931-59, July. [Downloadable!] (restricted)
    Other versions:
  9. Waldfogel, Jane, 1998. "Understanding the "Family Gap" in Pay for Women with Children," Journal of Economic Perspectives, American Economic Association, vol. 12(1), pages 137-56, Winter. [Downloadable!] (restricted)
  10. John S. Heywood & Uwe Jirjahn, 2004. "Teams, Teamwork and Absence," Scandinavian Journal of Economics, Blackwell Publishing, vol. 106(4), pages 765-782, December. [Downloadable!] (restricted)
  11. Wood, Robert G & Corcoran, Mary E & Courant, Paul N, 1993. "Pay Differences among the Highly Paid: The Male-Female Earnings Gap in Lawyers' Salaries," Journal of Labor Economics, University of Chicago Press, vol. 11(3), pages 417-41, July. [Downloadable!] (restricted)
  12. Morley Gunderson & Douglas Hyatt, 2001. "Workplace risks and wages: Canadian evidence from alternative models," Canadian Journal of Economics, Canadian Economics Association, vol. 34(2), pages 377-395, May. [Downloadable!] (restricted)
  13. Susan N. Houseman, 2001. "Why employers use flexible staffing arrangements: Evidence from an establishment survey," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 55(1), pages 149-170, October.
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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. John S. Heywood & W.S. Siebert & Xiangdong Wei, 2005. "High Performance Workplaces and Family Friendly Practices: Promises Made and Promises Kept," IZA Discussion Papers 1812, Institute for the Study of Labor (IZA). [Downloadable!]
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