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The implicit wage costs of family friendly work practices

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  • 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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    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. Beckmann, Michael, 2016. "Self-managed working time and firm performance: Microeconometric evidence," Working papers 2016/01, Faculty of Business and Economics - University of Basel.
    7. 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).
    8. 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.
    9. 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.
    10. 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.
    11. John S. Heywood & Laurie A. Miller, 2015. "Schedule Flexibility, Family Friendly Policies and Absence," Manchester School, University of Manchester, vol. 83(6), pages 652-675, December.
    12. 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.
    13. 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.
    14. Chad D. Cotti & M. Ryan Haley & Laurie A. Miller, 2014. "Workplace Flexibilities, Job Satisfaction and Union Membership in the US Workforce," British Journal of Industrial Relations, London School of Economics, vol. 52(3), pages 403-425, September.
    15. Joyce P. Jacobsen, 2009. "Accommodating Families," Chapters,in: Labor and Employment Law and Economics, chapter 11 Edward Elgar Publishing.
    16. 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.
    17. 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).
    18. 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.
    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. 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.
    21. repec:lan:wpaper:3171 is not listed on IDEAS

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