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Is Part-Time Employment Beneficial for Firm Productivity?

  • Künn-Nelen, Annemarie

    ()

    (ROA, Maastricht University)

  • de Grip, Andries

    ()

    (ROA, Maastricht University)

  • Fouarge, Didier

    ()

    (ROA, Maastricht University)

This paper analyzes whether part-time employment is beneficial for firm productivity in the service sector. Using a unique dataset on the Dutch pharmacy sector that includes the work hours of all employees and a “hard” physical measure of firm productivity, we estimate a production function including heterogeneous employment shares based on work hours. We find that a larger part-time employment share leads to greater firm productivity. Additional data on the timing of labor demand show that part-time employment enables firms to allocate labor more efficiently. First, firms with part-time workers can bridge the gap between opening hours and a full-time work week. Second, we find that during opening hours part-time workers are scheduled differently than full-timers. For example, we find that part-time workers enable their full-time colleagues to take lunch breaks so that the firm can remain open during these times.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 5423.

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Length: 37 pages
Date of creation: Jan 2011
Date of revision:
Publication status: published in: Industrial and Labor Relations Review, 2013, 66 (5), 1172-1191
Handle: RePEc:iza:izadps:dp5423
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  1. Rob Euwals & Maurice Hogerbrugge, 2004. "Explaining the growth of part-time employment; factors of supply and demand," CPB Discussion Paper 31, CPB Netherlands Bureau for Economic Policy Analysis.
  2. Lorraine Dearden & Howard Reed & John Van Reenen, 2005. "The impact of training on productivity and wages: evidence from British panel data," IFS Working Papers W05/16, Institute for Fiscal Studies.
  3. S. Black & L. Lynch, 1997. "How to compete: the impact of workplace practices and information technology on productivity," LSE Research Online Documents on Economics 20298, London School of Economics and Political Science, LSE Library.
  4. Euwals, Rob & Hogerbrugge, Maurice, 2004. "Explaining the Growth of Part-Time Employment: Factors of Supply and Demand," IZA Discussion Papers 1124, Institute for the Study of Labor (IZA).
  5. Virginie Pe´rotin & Andrew Robinson, 2000. "Employee Participation and Equal Opportunities Practices: Productivity Effect and Potential Complementarities," British Journal of Industrial Relations, London School of Economics, vol. 38(4), pages 557-583, December.
  6. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Oxford University Press, vol. 58(2), pages 277-297.
  7. Susanna Iranzo & Fabiano Schivardi & Elisa Tosetti, 2006. "Skill dispersion and firm productivity; an analysis with employer-employee matched data," Temi di discussione (Economic working papers) 577, Bank of Italy, Economic Research and International Relations Area.
  8. Daniel Aaronson & Eric French, 2001. "The effect of part-time work on wages: evidence from the Social Security rules," Working Paper Series WP-01-20, Federal Reserve Bank of Chicago.
  9. Pekka Ilmakunnas & Mika Maliranta, 2005. "Technology, Labour Characteristics and Wage-productivity Gaps," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 67(5), pages 623-645, October.
  10. Spyros Arvanitis, 2005. "Modes of labor flexibility at firm level: Are there any implications for performance and innovation? Evidence for the Swiss economy," Industrial and Corporate Change, Oxford University Press, vol. 14(6), pages 993-1016, December.
  11. Walter Y. Oi, 1962. "Labor as a Quasi-Fixed Factor," Journal of Political Economy, University of Chicago Press, vol. 70, pages 538.
  12. Manning, Alan & Petrongolo, Barbara, 2007. "The Part-Time Pay Penalty for Women in Britain," CEPR Discussion Papers 6058, C.E.P.R. Discussion Papers.
  13. Montgomery, Mark, 1988. "On the Determinants of Employer Demand for Part-Time Workers," The Review of Economics and Statistics, MIT Press, vol. 70(1), pages 112-17, February.
  14. John Baffoe-Bonnie, 2004. "Interindustry part-time and full-time wage differentials: regional and national analysis," Applied Economics, Taylor & Francis Journals, vol. 36(2), pages 107-118.
  15. M Arellano & O Bover, 1990. "Another Look at the Instrumental Variable Estimation of Error-Components Models," CEP Discussion Papers dp0007, Centre for Economic Performance, LSE.
  16. Kochan, Thomas A., 1996. "What works at work : overview and assessment," Working papers 3886-96., Massachusetts Institute of Technology (MIT), Sloan School of Management.
  17. M. S. Feldstein, 1967. "Specification of the Labour Input in the Aggregate Production Function," Review of Economic Studies, Oxford University Press, vol. 34(4), pages 375-386.
  18. Paul Osterman, 1994. "How Common is Workplace Transformation and Who Adopts it?," ILR Review, Cornell University, ILR School, vol. 47(2), pages 173-188, January.
  19. Leslie, Derek G & Wise, John, 1980. "The Productivity of Hours in U.K. Manufacturing and Production Industries," Economic Journal, Royal Economic Society, vol. 90(357), pages 74-84, March.
  20. Andries de Grip & Inge Sieben, 2005. "The effects of human resource management on small firms' productivity and employees' wages," Applied Economics, Taylor & Francis Journals, vol. 37(9), pages 1047-1054.
  21. Sébastien Roux, 2007. "Les gains de la flexibilité d'emploi pour les entreprises : le travail à temps partiel et de courte durée," Reflets et perspectives de la vie économique, De Boeck Université, vol. 0(2), pages 117-140.
  22. John F. Ermisch & Robert E. Wright, 1993. "Wage Offers and Full-Time and Part-Time Employment by British Women," Journal of Human Resources, University of Wisconsin Press, vol. 28(1), pages 111-133.
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