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The Premium for Part-Time Work in Australia

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Abstract

Booth and Wood (2008), using longitudinal data from 2001 through 2004, found a large part-time wage premium for both men and women in Australia. Longitudinal studies of the full-time/part-time wage differential in other countries find small penalties or premiums, or no significant wage differentials. The objective of this paper is to explain the nature of the premium in Australia. We find the premium is pervasive across age groups, occupations and industries. It is not explained by the way part-time work is defined, or by the pay loading received in Australia by employees on casual contracts. We find substantial hourly wage increases accompany a move into part-time employment and similarly large hourly wage decreases occur when moving into full-time employment. The magnitude of these wage changes is smaller when the change from full-time to part-time employment (or vice versa) occurs with a change of employer. For women, we found evidence that the contemporaneous effect on the wage of moving into, or out of, part-time employment is not sustained beyond one, or at most two, years.

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File URL: http://business.uow.edu.au/content/groups/public/@web/@commerce/@econ/documents/doc/uow158973.pdf
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Bibliographic Info

Paper provided by School of Economics, University of Wollongong, NSW, Australia in its series Economics Working Papers with number wp13-04.

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Length: 37 pages
Date of creation: 2013
Date of revision:
Handle: RePEc:uow:depec1:wp13-04

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Postal: School of Economics, University of Wollongong, Northfields Avenue, Wollongong NSW 2522 Australia
Phone: +612 4221-3659
Fax: +612 4221-3725
Web page: http://business.uow.edu.au/econ/index.html
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Keywords: Full-Time/Part-Time Work Wage Differentials;

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  1. Joan R. Rodgers, 2004. "Hourly Wages of full-time and part-time employees in Australia," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 7(2), pages 231-254, June.
  2. Heckman, James J, 1979. "Sample Selection Bias as a Specification Error," Econometrica, Econometric Society, vol. 47(1), pages 153-61, January.
  3. Sara Connolly & Mary Gregory, 2009. "The part-time pay penalty: earnings trajectories of British Women," Oxford Economic Papers, Oxford University Press, vol. 61(suppl_1), pages i76-i97, April.
  4. John F. Ermisch & Robert E. Wright, 1993. "Wage Offers and Full-Time and Part-Time Employment by British Women," Journal of Human Resources, University of Wisconsin Press, vol. 28(1), pages 111-133.
  5. Hirsch, Barry T. & Schumacher, Edward J., 1995. "Monopsony power and relative wages in the labor market for nurses," Journal of Health Economics, Elsevier, vol. 14(4), pages 443-476, October.
  6. James E. Long & Ethel B. Jones, 1981. "Married women in part-time employment," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 34(3), pages 413-425, April.
  7. Alan Manning & Barbara Petrongolo, 2008. "The Part-Time Pay Penalty for Women in Britain," Economic Journal, Royal Economic Society, vol. 118(526), pages F28-F51, 02.
  8. Montgomery, Mark & Cosgrove, James, 1995. "Are Part-Time Women Paid Less? A Model with Firm-Specific Effects," Economic Inquiry, Western Economic Association International, vol. 33(1), pages 119-33, January.
  9. Wayne Simpson, 1986. "Analysis of Part-Time Pay in Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 19(4), pages 798-807, November.
  10. Lettau, Michael K., 1997. "Compensation in part-time jobs versus full-time jobs What if the job is the same?," Economics Letters, Elsevier, vol. 56(1), pages 101-106, September.
  11. Mark Wooden, 2001. "The Growth In “Unpaid” Working Time," Economic Papers, The Economic Society of Australia, vol. 20(1), pages 29-43, 03.
  12. Mark Wooden & Nicole Watson, 2007. "The HILDA Survey and its Contribution to Economic and Social Research (So Far)," The Economic Record, The Economic Society of Australia, vol. 83(261), pages 208-231, 06.
  13. Barry T. Hirsch, 2005. "Why do part-time workers earn less? The role of worker and job skills," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 58(4), pages 525-551, July.
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