The part-time trap: examining restrictions in women's labor supply decision

The Netherlands has the highest rate of female part-time employment among OECD countries, yet it remains unclear whether this patterns reflects limited opportunities to work full-time or a preference for part-time work. The first explanation refers to labor market restrictions, such as job-specific hour constraints and employer preferences, while the second points to individual labor supply preferences. This study examines these competing explanations for the persistent gender gap in working hours. We exploit a Dutch policy reform that granted employees the right to adjust their hours freely. A two-way fixed effects analysis using administrative data finds no change in working hours following the reform, suggesting either that hour constraints persist or that women were already working their preferred hours. To further investigate restrictions, we analyze survey data on working-hour mismatches (gaps between preferred and actual hours) and subsequent hour adjustments. Women seeking to work more adjust their hours toward preferred levels more successfully when changing jobs than when staying in the same job, indicating that within-job constraints limit opportunities to increase hours. In contrast, we find no evidence of enduring constraints for women who prefer to work fewer hours, reflecting the widespread availability of part-time contracts. These findings highlight structural barriers for underemployed women and challenge the assumption that part-time work is purely a matter of choice.