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Valuing Alternative Work Arrangements

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  • Alexandre Mas
  • Amanda Pallais

Abstract

We use a field experiment to study how workers value alternative work arrangements. During the application process to staff a national call center, we randomly offered applicants choices between traditional M-F 9 am – 5 pm office positions and alternatives. These alternatives include flexible scheduling, working from home, and positions that give the employer discretion over scheduling. We randomly varied the wage difference between the traditional option and the alternative, allowing us to estimate the entire distribution of willingness to pay (WTP) for these alternatives. We validate our results using a nationally-representative survey. The great majority of workers are not willing to pay for flexible scheduling relative to a traditional schedule: either the ability to choose the days and times of work or the number of hours they work. However, the average worker is willing to give up 20% of wages to avoid a schedule set by an employer on a week’s notice. This largely represents workers’ aversion to evening and weekend work, not scheduling unpredictability. Traditional M-F 9 am – 5 pm schedules are preferred by most jobseekers. Despite the fact that the average worker isn’t willing to pay for scheduling flexibility, a tail of workers with high WTP allows for sizable compensating differentials. Of the worker-friendly options we test, workers are willing to pay the most (8% of wages) for the option of working from home. Women, particularly those with young children, have higher WTP for work from home and to avoid employer scheduling discretion. They are slightly more likely to be in jobs with these amenities, but the differences are not large enough to explain any wage gaps.

Suggested Citation

  • Alexandre Mas & Amanda Pallais, 2016. "Valuing Alternative Work Arrangements," NBER Working Papers 22708, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:22708
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    Cited by:

    1. Redmond, Paul & McGuinness, Seamus, 2017. "The Gender Wage Gap in Europe: Job Preferences, Gender Convergence and Distributional Effects," IZA Discussion Papers 10933, Institute for the Study of Labor (IZA).
    2. repec:nbr:nberch:14108 is not listed on IDEAS
    3. HASEBE Takuya & KONISHI Yoshifumi & SHIN Kong Joo & MANAGI Shunsuke, 2018. "White Collar Exemption: Panacea for long work hours and low earnings?," Discussion papers 18002, Research Institute of Economy, Trade and Industry (RIETI).
    4. David Card & Ana Rute Cardoso & Joerg Heining & Patrick Kline, 2018. "Firms and Labor Market Inequality: Evidence and Some Theory," Journal of Labor Economics, University of Chicago Press, vol. 36(S1), pages 13-70.
    5. Radoslawa Nikolowa & Daniel Ferreira, 2018. "How to Sell Jobs," Working Papers 846, Queen Mary University of London, School of Economics and Finance.
    6. Isaac Sorkin, 2016. "Ranking Firms Using Revealed Preference," 2016 Meeting Papers 66, Society for Economic Dynamics.
    7. Bäckman, Claes & Hanspal, Tobin, 2018. "The geography of alternative work," SAFE Working Paper Series 207, Research Center SAFE - Sustainable Architecture for Finance in Europe, Goethe University Frankfurt.
    8. Ina Ganguli & Patrick Gaulé, 2018. "Will the U.S. Keep the Best and the Brightest (as Post-docs)? Career and Location Preferences of Foreign STEM PhDs," NBER Chapters,in: The Role of Immigrants and Foreign Students in Science, Innovation, and Entrepreneurship National Bureau of Economic Research, Inc.
    9. Jeffrey Clemens & Lisa B. Kahn & Jonathan Meer, 2018. "The Minimum Wage, Fringe Benefits, and Worker Welfare," NBER Working Papers 24635, National Bureau of Economic Research, Inc.
    10. repec:eee:soceco:v:69:y:2017:i:c:p:50-60 is not listed on IDEAS
    11. Lawrence F. Katz & Alan B. Krueger, 2016. "The Rise and Nature of Alternative Work Arrangements in the United States, 1995-2015," Working Papers 603, Princeton University, Department of Economics, Industrial Relations Section..
    12. John Ameriks & Joseph S. Briggs & Andrew Caplin & Minjoon Lee & Matthew D. Shapiro & Christopher Tonetti, 2017. "Older Americans Would Work Longer If Jobs Were Flexible," NBER Working Papers 24008, National Bureau of Economic Research, Inc.
    13. German Cubas & Chinhui Juhn & Pedro Silos, 2018. "Coordinated Work Schedules and the Gender Wage Gap," 2018 Meeting Papers 249, Society for Economic Dynamics.
    14. Carpenter, Jeffrey & Hans Matthews, Peter & Robbett, Andrea, 2017. "Compensating differentials in experimental labor markets," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 69(C), pages 50-60.
    15. repec:aea:jecper:v:32:y:2018:i:3:p:239-58 is not listed on IDEAS

    More about this item

    JEL classification:

    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • M50 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - General

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