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Insecurity of Employment and Work-Life Balance: From the viewpoint of compensating wage differentials

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  • MORIKAWA Masayuki

Abstract

This paper presents survey-based evidence on the "fair" compensating wage differentials for insecurity of employment and lack of work-life balance (WLB). We present facts about individual perceptions of the desirable compensating differentials and then estimate the effects of working hours and wages on job satisfaction. The fair wage premiums for insecurity of employment and lack of WLB are both around 10% to 20%. The actual relative wages of nonstandard workers seem to be lower than those in the hedonic equilibrium. If "short-hour regular jobs" are characterized by both strong employment protection and WLB, the relative wage discount of 10% to 20% coincides with the average worker's perception of fairness. Working hours have a negative effect on job satisfaction and the wage level has a positive effect on job satisfaction, but the magnitudes of the effects differ between male and female workers. In order to achieve diversity of working styles, work schedule flexibility should be accompanied by a wage adjustment, which would contribute to the adoption and diffusion of WLB practices.

Suggested Citation

  • 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).
  • Handle: RePEc:eti:dpaper:10052
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    2. Ernesto Villanueva, 2004. "Compensating wage differentials and voluntary job changes: Evidence from West Germany," Economics Working Papers 738, Department of Economics and Business, Universitat Pompeu Fabra.
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    5. Usui, Emiko, 2008. "Job satisfaction and the gender composition of jobs," Economics Letters, Elsevier, vol. 99(1), pages 23-26, April.
    6. Alison L. Booth & Jan C. Van Ours, 2009. "Hours of Work and Gender Identity: Does Part-time Work Make the Family Happier?," Economica, London School of Economics and Political Science, vol. 76(301), pages 176-196, February.
    7. Nick Bloom & Tobias Kretschmer & John Van Reenan, 2009. "Work-Life Balance, Management Practices and Productivity," NBER Chapters,in: International Differences in the Business Practices and Productivity of Firms, pages 15-54 National Bureau of Economic Research, Inc.
    8. Lanfranchi, Joseph & Ohlsson, Henry & Skalli, Ali, 2002. "Compensating wage differentials and shift work preferences," Economics Letters, Elsevier, vol. 74(3), pages 393-398, February.
    9. MORIKAWA Masayuki, 2010. "Volatility, Nonstandard Employment, and Productivity: An empirical analysis using firm-level data," Discussion papers 10025, Research Institute of Economy, Trade and Industry (RIETI).
    10. 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.
    11. Hwang, Hae-shin & Reed, W Robert & Hubbard, Carlton, 1992. "Compensating Wage Differentials and Unobserved Productivity," Journal of Political Economy, University of Chicago Press, vol. 100(4), pages 835-858, August.
    12. repec:dgr:kubcen:200769 is not listed on IDEAS
    13. Nick Bloom & John Van Reenen, 2006. "Management Practices, Work--L ife Balance, and Productivity: A Review of Some Recent Evidence," Oxford Review of Economic Policy, Oxford University Press, vol. 22(4), pages 457-482, Winter.
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