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Part-Time Work, Fixed-Term Contracts, and the Returns to Experience

Listed author(s):
  • Fernández-Kranz, Daniel

    ()

    (IE Business School, Madrid)

  • Paul, Marie

    ()

    (University of Duisburg-Essen)

  • Rodríguez-Planas, Núria

    ()

    (Queens College, CUNY)

Using data from Spanish Social Security records, we investigate the returns to experience in different flexible work arrangements, including part-time and full-time work, and permanent and fixed-term contracts. We use a trivariate random effects model which consists of a three-equation system that is estimated simultaneously by Markov Chain Monte Carlo techniques. Our results indicate that there is a large pay gap for working part-time which persists many years after having resumed full-time work. We also find that working part-time involves lower returns to experience than standard full-time employment and thus a substantial negative wage differential for those employed part-time accumulates over time. Finally, we find that heterogeneity exist by contract type and motherhood status.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 5815.

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Length: 31 pages
Date of creation: Jun 2011
Handle: RePEc:iza:izadps:dp5815
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  1. Hielke Buddelmeyer & Kenneth Troske, 2004. "Joint estimation of sequential labor force participation and fertility decisions using Markov chain Monte Carlo techniques," Econometric Society 2004 North American Winter Meetings 334, Econometric Society.
  2. Booth, Alison L. & Wood, Margi, 2006. "Back-to-front Down-under? Part-time/Full-time Wage Differentials in Australia," IZA Discussion Papers 2268, Institute for the Study of Labor (IZA).
  3. Buchinsky, Moshe & Fougère, Denis & Kramarz, Francis & Tchernis, Rusty, 2005. "Interfirm Mobility, Wages, and the Returns to Seniority and Experience in the U.S," IZA Discussion Papers 1521, Institute for the Study of Labor (IZA).
  4. Bentolila, Samuel & Cahuc, Pierre & Dolado, Juan J. & Le Barbanchon, Thomas, 2010. "Two-Tier Labor Markets in the Great Recession: France vs. Spain," CEPR Discussion Papers 8152, C.E.P.R. Discussion Papers.
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  12. Guillaume Horny & Rute Mendes & Gerard J. van den Berg, 2012. "Job Durations With Worker- and Firm-Specific Effects: MCMC Estimation With Longitudinal Employer--Employee Data," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 30(3), pages 468-480, March.
  13. Dean R. Hyslop, 1999. "State Dependence, Serial Correlation and Heterogeneity in Intertemporal Labor Force Participation of Married Women," Econometrica, Econometric Society, vol. 67(6), pages 1255-1294, November.
  14. Fitzenberger, Bernd & Osikominu, Aderonke & Paul, Marie, 2010. "The heterogeneous effects of training incidence and duration on labor market transitions," ZEW Discussion Papers 10-077, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  15. Light, Audrey & Ureta, Manuelita, 1995. "Early-Career Work Experience and Gender Wage Differentials," Journal of Labor Economics, University of Chicago Press, vol. 13(1), pages 121-154, January.
  16. Olivier Blanchard & Augustin Landier, 2001. "The Perverse Effects of Partial Labor Market Reform: Fixed Duration Contracts in France," NBER Working Papers 8219, National Bureau of Economic Research, Inc.
  17. Sara Connolly & Mary Gregory, 2009. "The part-time pay penalty: earnings trajectories of British Women," Oxford Economic Papers, Oxford University Press, vol. 61(suppl_1), pages 76-97, April.
  18. Jeffrey M Wooldridge, 2002. "Simple solutions to the initial conditions problem in dynamic, nonlinear panel data models with unobserved heterogeneity," CeMMAP working papers CWP18/02, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
  19. 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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