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The Part-Time Wage Penalty: A Career Perspective

Author

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  • Russo, Giovanni

    () (European Centre for the Development of Vocational Training (Cedefop))

  • Hassink, Wolter

    () (Utrecht University)

Abstract

Part-time employment has become an extremely popular work arrangement in the Netherlands because it renders employment compatible with non-work activities. We posit that there may be a downside to part-time employment, which is related to its negative effects on workers’ career. This may be the case when firms use promotions to stimulate skill acquisition and human capital accumulation or when they base their work incentive schemes on performance measures that are affected by the number of hours worked or when they screen workers on the basis of the number of hours worked. Because promotions are an important source of wage growth, the low incidence of promotion among part-time workers may contribute to the emergence of the part-time wage penalty (i.e., the wage difference between a part-time worker and an otherwise equal full-time worker) in due time. Consistent with this view, we find that (male and female) workers in part-time jobs are characterized by a lower incidence of promotion relative to workers in full-time jobs and that promotions account for a wage growth of eight log points. Moreover, we find that the part-time wage penalty does not arise at the onset of a career as young workers join the labor market but that it tends to develop over time as labor market experience and the effect of missed promotions cumulate.

Suggested Citation

  • Russo, Giovanni & Hassink, Wolter, 2005. "The Part-Time Wage Penalty: A Career Perspective," IZA Discussion Papers 1468, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp1468
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    References listed on IDEAS

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    Cited by:

    1. Kaiser, Lutz C., 2005. "Gender-Job Satisfaction Differences across Europe: An Indicator for Labor Market Modernization," IZA Discussion Papers 1876, Institute for the Study of Labor (IZA).
    2. Síle O'Dorchai & Robert Plasman & François Rycx, 2007. "The part-time wage penalty in European countries: how large is it for men?," International Journal of Manpower, Emerald Group Publishing, vol. 28(7), pages 571-603, October.
    3. Lutz C. Kaiser, 2005. "Gender-Job Satisfaction Differences across Europe: An Indicator for Labor Market Modernization," Discussion Papers of DIW Berlin 537, DIW Berlin, German Institute for Economic Research.
    4. Wetzels, Cécile, 2007. "First Time Parents’ Paid Work Patterns in Amsterdam: Father’s Part-Time Work, Family’s Immigrant Background and Mother’s Work for Pay When the Infant Is Very Young," IZA Discussion Papers 2853, Institute for the Study of Labor (IZA).
    5. Jenny Willson & Andy Dickerson, 2010. "Part time employment and happiness: A cross-country analysis," Working Papers 2010021, The University of Sheffield, Department of Economics, revised Dec 2010.
    6. Giovanni Russo & Wolter Hassink, 2008. "The Part-Time Wage Gap: a Career Perspective," De Economist, Springer, vol. 156(2), pages 145-174, June.

    More about this item

    Keywords

    part-time employment; wage gap; wages; promotions;

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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