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The Part-Time Pay Penalty in a Segmented Labor Market

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  • Daniel Fernández-Kranz
  • Núria Rodríguez-Planas

Abstract

This paper is the first to examine the implications of switching to PT work for womens subsequent earnings trajectories, distinguishing by their type of contract: permanent or fixedterm. Using a rich longitudinal Spanish data set from Social Security records of over 76,000 prime-aged women strongly attached to the Spanish labor market, we find that PT work aggravates the segmentation of the labor market insofar there is a PT pay penalty and this penalty is larger and more persistent in the case of women with fixed-term contracts. The paper discusses problems arising in empirical estimation (including a problem not discussed in the literature up to now: the differential measurement error of the LHS variable by PT status), and how to address them. It concludes with policy implications relevant for Continental Europe and its dual structure of employment protection.

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Paper provided by Barcelona Graduate School of Economics in its series Working Papers with number 458.

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Date of creation: May 2010
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Handle: RePEc:bge:wpaper:458
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Keywords: Fixed-term and permanent contract; hourly wage levels and growth; prime-aged women; fixed-effects estimator; differential measurement error of LHS variable; underlying channels;

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Find related papers by JEL classification:
  • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
  • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
  • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
  • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
  • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
  • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
  • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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Cited by:

  1. Schmid, Günther, 2010. "Non-Standard Employment and Labour Force Participation: A Comparative View of the Recent Development in Europe," IZA Discussion Papers 5087, Institute for the Study of Labor (IZA).
  2. María Dolores Guilló Fuentes & Alfonsa Denia Cuesta, 2011. "Labour status and involuntary employment: family ties and part-time work in Spain," Working Papers. Serie AD 2011-11, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  3. Eleonora Matteazzi & Ariane Pailhé & Anne Solaz, 2012. "Part-time wage penalties in Europe: A matter of selection or segregation?," Working Papers 250, ECINEQ, Society for the Study of Economic Inequality.
  4. Wolf, Elke, 2013. "The German part-time wage gap: bad news for men," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79969, Verein für Socialpolitik / German Economic Association.
  5. Colella, Fabrizio, 2014. "Women's Part-Time - Full-Time Wage Differentials in Europe: an Endogenous Switching Model," MPRA Paper 55287, University Library of Munich, Germany.
  6. Elke Wolf, 2014. "The German Part-Time Wage Gap: Bad News for Men," SOEPpapers on Multidisciplinary Panel Data Research 663, DIW Berlin, The German Socio-Economic Panel (SOEP).
  7. Fernández-Kranz, Daniel & Paul, Marie & Rodríguez-Planas, Núria, 2011. "Part-Time Work, Fixed-Term Contracts, and the Returns to Experience," IZA Discussion Papers 5815, Institute for the Study of Labor (IZA).

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