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The Implicit Costs and Benefits of Family Friendly Work Practices

Author

Listed:
  • Heywood, John S.

    (University of Wisconsin, Milwaukee)

  • Siebert, W. Stanley

    (University of Birmingham)

  • Wei, Xiangdong

    (Lingnan University)

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 show that the ability to confirm this compensating wage differential depends critically on an appropriate treatment model designed to purge typical estimates of the income effect. We find that family friendly jobs may be associated with as much as a 20 percent reduction in earnings. Our estimates can be used to inform impact assessments of new UK legislation extending family friendly practices.

Suggested Citation

  • Heywood, John S. & Siebert, W. Stanley & Wei, Xiangdong, 2005. "The Implicit Costs and Benefits of Family Friendly Work Practices," IZA Discussion Papers 1581, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp1581
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    References listed on IDEAS

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    Cited by:

    1. Heywood, John S. & Siebert, W. Stanley & Wei, Xiangdong, 2005. "High Performance Workplaces and Family Friendly Practices: Promises Made and Promises Kept," IZA Discussion Papers 1812, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    compensating wage differential; hedonic equilibrium; family friendly work practices; legislative impact assessment;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions

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