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The implicit wage costs of family friendly work practices

Author

Listed:
  • John S. Heywood
  • W. Stanley Siebert
  • Xiangdong Wei

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 find that workers overstate their access to family friendly practices. We also find a surprisingly high compensating wage differential of around 20%. However, this result depends critically on a treatment model designed to purge typical estimates of the income effect. It is also largely associated with indicators of flexible working schedules and cannot be replicated for workplace nursery support or working at home. Copyright 2007 , Oxford University Press.

Suggested Citation

  • John S. Heywood & W. Stanley Siebert & Xiangdong Wei, 2007. "The implicit wage costs of family friendly work practices," Oxford Economic Papers, Oxford University Press, vol. 59(2), pages 275-300, April.
  • Handle: RePEc:oup:oxecpp:v:59:y:2007:i:2:p:275-300
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    File URL: http://hdl.handle.net/10.1093/oep/gpm006
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    References listed on IDEAS

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    1. Oaxaca, Ronald, 1973. "Male-Female Wage Differentials in Urban Labor Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, October.
    2. Miller, Paul W, 1987. "The Wage Effect of the Occupational Segregation of Women in Britain," Economic Journal, Royal Economic Society, vol. 97(388), pages 885-896, December.
    3. Hawke, A., 1991. "Male-Female Wage Differentials: How Important is Occupational Segragation? ," CEPR Discussion Papers 256, Centre for Economic Policy Research, Research School of Economics, Australian National University.
    4. McFadden, Daniel, 1974. "The measurement of urban travel demand," Journal of Public Economics, Elsevier, vol. 3(4), pages 303-328, November.
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    Cited by:

    1. repec:lan:wpaper:2922 is not listed on IDEAS
    2. repec:lan:wpaper:3016 is not listed on IDEAS
    3. Verena Lauber & Johanna Storck, 2016. "Helping with the Kids? How Family-Friendly Workplaces Affect Parental Well-Being and Behavior," SOEPpapers on Multidisciplinary Panel Data Research 883, DIW Berlin, The German Socio-Economic Panel (SOEP).
    4. Michael Beckmann, 2016. "Working-time autonomy as a management practice," IZA World of Labor, Institute for the Study of Labor (IZA), pages 230-230, January.
    5. Ali Fakih & Pascal L. Ghazalian, 2013. "Female Labour Force Participation in MENA's Manufacturing Sector: The Implications of Firm-related and National Factors," CIRANO Working Papers 2013s-46, CIRANO.
    6. C Green & J S Heywood, 2007. "Are flexible contracts bad for workers? Evidence from job satisfaction data," Working Papers 590927, Lancaster University Management School, Economics Department.
    7. Verena Lauber & Johanna Storck, 2016. "Helping with the Kids? How Family-Friendly Workplaces Affect Parental Well-Being and Behavior," Discussion Papers of DIW Berlin 1630, DIW Berlin, German Institute for Economic Research.
    8. Uwe Jirjahn, 2011. "Gender, Worker Representation and the Profitability of Firms in Germany," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 8(2), pages 281-298, December.
    9. Tadashi Sakai & Naomi Miyazato, 2014. "Who values the family-friendly aspects of a job? Evidence from the Japanese labour market," The Japanese Economic Review, Japanese Economic Association, vol. 65(3), pages 397-413, September.
    10. Verena Lauber & Sarah Reiter & Johanna Storck, 2015. "Familienfreundlichkeit in Unternehmen - Status Quo in Deutschland und Forschungsstand," DIW Roundup: Politik im Fokus 77, DIW Berlin, German Institute for Economic Research.
    11. Siebert, W. Stanley & Peng, Fei & Maimaiti, Yasheng, 2011. "HRM Practices and Performance of Family-Run Workplaces: Evidence from the 2004 WERS," IZA Discussion Papers 5899, Institute for the Study of Labor (IZA).
    12. Ali Fakih, 2014. "Vacation Leave, Work Hours, and Wages: New Evidence from Linked Employer–Employee Data," LABOUR, CEIS, vol. 28(4), pages 376-398, December.
    13. Xuhong Su & Barry Bozeman, 2016. "Family Friendly Policies in STEM Departments: Awareness and Determinants," Research in Higher Education, Springer;Association for Institutional Research, vol. 57(8), pages 990-1009, December.
    14. repec:lan:wpaper:3171 is not listed on IDEAS
    15. Michael Beckmann, 2016. "Self-managed working time and firm performance: Microeconometric evidence," Working papers 2016/01, Faculty of Business and Economics - University of Basel.
    16. MORIKAWA Masayuki, 2010. "Insecurity of Employment and Work-Life Balance: From the viewpoint of compensating wage differentials," Discussion papers 10052, Research Institute of Economy, Trade and Industry (RIETI).
    17. Joyce P. Jacobsen, 2009. "Accommodating Families," Chapters,in: Labor and Employment Law and Economics, chapter 11 Edward Elgar Publishing.
    18. Daniel Possenriede & Wolter H.J. Hassink & Janneke Plantenga, 2016. "Does temporal and locational flexibility of work increase the supply of working hours? Evidence from the Netherlands," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-34, December.
    19. Beckmann, Michael, 2016. "Self-managed working time and firm performance: Microeconometric evidence," Annual Conference 2016 (Augsburg): Demographic Change 145623, Verein für Socialpolitik / German Economic Association.
    20. Joyce P. Jacobsen, 2009. "Accommodating Families," Chapters,in: Labor and Employment Law and Economics, chapter 11 Edward Elgar Publishing.

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