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Is part-time employment beneficial for firm productivity?

  • Nelen Annemarie
  • Grip Andries de
  • Fouarge Didier


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 Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR) in its series Research Memorandum with number 007.

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Date of creation: 2011
Date of revision:
Handle: RePEc:unm:umamet:2011007
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  1. S Black & L Lynch, 1997. "How to Compete: The Impact of Workplace Practices and Information Technology on Productivity," CEP Discussion Papers dp0376, Centre for Economic Performance, LSE.
  2. Paul Osterman, 1994. "How common is workplace transformation and who adopts it?," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 47(2), pages 173-188, January.
  3. Manning, Alan & Petrongolo, Barbara, 2007. "The Part-Time Pay Penalty for Women in Britain," CEPR Discussion Papers 6058, C.E.P.R. Discussion Papers.
  4. 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.
  5. Susana Iranzo & Fabiano Schivardi & Elisa Tosetti, 2008. "Skill Dispersion and Firm Productivity: An Analysis with Employer-Employee Matched Data," Journal of Labor Economics, University of Chicago Press, vol. 26(2), pages 247-285, 04.
  6. Arellano, Manuel & Bond, Stephen, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Wiley Blackwell, vol. 58(2), pages 277-97, April.
  7. Daniel Aaronson & Eric French, 2004. "The Effect of Part-Time Work on Wages: Evidence from the Social Security Rules," Journal of Labor Economics, University of Chicago Press, vol. 22(2), pages 329-352, April.
  8. 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.
  9. 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.
  10. 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.
  11. 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.
  12. 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.
  13. 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.
  14. 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.
  15. Kochan, Thomas A., 1996. "What works at work : overview and assessment," Working papers 3886-96., Massachusetts Institute of Technology (MIT), Sloan School of Management.
  16. 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.
  17. Walter Y. Oi, 1962. "Labor as a Quasi-Fixed Factor," Journal of Political Economy, University of Chicago Press, vol. 70, pages 538.
  18. Craine, Roger, 1973. "On the Service Flow from Labour," Review of Economic Studies, Wiley Blackwell, vol. 40(11), pages 39-46, January.
  19. 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).
  20. 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.
  21. 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.
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