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The Part-Time Pay Penalty in a Segmented Labor Market

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  • Fernández-Kranz, Daniel

    (IE Business School, Madrid)

  • Rodríguez-Planas, Núria

    (Queens College, CUNY)

Abstract

While much of the literature that investigates the part-time (PT) / full-time (FT) hourly wage differential and its causes focuses on average effects, very few studies analyze the heterogeneous effects of PT work across different subgroups, despite the policy relevance of understanding channels behind the (raw) PT penalty in different labor markets. This paper is the first to examine the implications of switching to PT work for women's subsequent earnings trajectories, distinguishing by their type of contract: permanent or fixed-term. Using a 21-year unbalanced Social Security records panel 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, and how to address them. It concludes with policy implications relevant for Continental Europe and its dual structure of employment protection.

Suggested Citation

  • Fernández-Kranz, Daniel & Rodríguez-Planas, Núria, 2009. "The Part-Time Pay Penalty in a Segmented Labor Market," IZA Discussion Papers 4342, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp4342
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    Cited by:

    1. Annekatrin Schrenker, 2023. "Causal Misperceptions of the Part-Time Pay Gap," Berlin School of Economics Discussion Papers 0010, Berlin School of Economics.
    2. Devicienti, Francesco & Grinza, Elena & Vannoni, Davide, 2020. "Why do firms (dis)like part-time contracts?," Labour Economics, Elsevier, vol. 65(C).
    3. 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).
    4. O’Sullivan Maeve & Cross Christine & Lavelle Jonathan, 2020. "The forgotten labour force: Characteristics and trends for older female part-time workers in Ireland," The Irish Journal of Management, Sciendo, vol. 39(1), pages 47-60, August.
    5. Kaya Ezgi, 2021. "Gender wage gap across the distribution: What is the role of within- and between-firm effects?," IZA Journal of Development and Migration, Sciendo & Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 12(1), pages 1-49, January.
    6. Ms. Era Dabla-Norris & Carlo Pizzinelli & Jay Rappaport, 2019. "Job Polarization and the Declining Fortunes of the Young: Evidence from the United Kingdom," IMF Working Papers 2019/216, International Monetary Fund.
    7. Maeve O'Sullivan & Christine Cross & Jonathan Lavelle, 2021. "Good or bad jobs? Characteristics of older female part‐time work," Industrial Relations Journal, Wiley Blackwell, vol. 52(5), pages 423-441, September.
    8. Daniel Fernández-Kranz & Marie Paul & Núria Rodríguez-Planas, 2015. "Part-Time Work, Fixed-Term Contracts, and the Returns to Experience," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 77(4), pages 512-541, August.
    9. Annekatrin Schrenker, 2023. "Causal Misperceptions of the Part-Time Pay Gap," Discussion Papers of DIW Berlin 2031, DIW Berlin, German Institute for Economic Research.
    10. 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.
    11. Nguyễn, Hữu Chí. & Nguyen-Huu, Thanh Tam. & Le, Thi-Thuy-Linh., 2016. "Non-standard forms of employment in some Asian countries : a study of wages and working conditions of temporary workers," ILO Working Papers 994901213402676, International Labour Organization.
    12. Patricia Gallego Granados, 2019. "The Part-Time Wage Gap across the Wage Distribution," Discussion Papers of DIW Berlin 1791, DIW Berlin, German Institute for Economic Research.
    13. Annekatrin Schrenker, 2023. "Causal Misperceptions of the Part-Time Pay Gap," Rationality and Competition Discussion Paper Series 372, CRC TRR 190 Rationality and Competition.
    14. 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.
    15. O’Sullivan Maeve & Cross Christine & Lavelle Jonathan, 2020. "The forgotten labour force: Characteristics and trends for older female part-time workers in Ireland," The Irish Journal of Management, Sciendo, vol. 39(1), pages 47-60, August.
    16. 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).
    17. José M Arranz & Enrique Fernández-Macías & Carlos García-Serrano, 2021. "Wage differentials and segmentation: The impact of institutions and changing economic conditions," European Journal of Industrial Relations, , vol. 27(2), pages 203-227, June.
    18. Schmid, Günther, 2010. "Non-Standard Employment and Labour Force Participation: A Comparative View of the Recent Development in Europe," IZA Discussion Papers 5087, Institute of Labor Economics (IZA).
    19. Ahmed Elsayed & Andries Grip & Didier Fouarge, 2017. "Computer Use, Job Tasks and the Part-Time Pay Penalty," British Journal of Industrial Relations, London School of Economics, vol. 55(1), pages 58-82, March.
    20. Wolf, Elke, 2013. "The German part-time wage gap: bad news for men," VfS Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79969, Verein für Socialpolitik / German Economic Association.

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    More about this item

    Keywords

    differential measurement error of HS variable; prime-aged women; fixed-term and permanent contract; hourly wage levels and growth; fixed-effects estimator; underlying channels;
    All these keywords.

    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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