The German part-time wage gap: bad news for men

Despite the increasing occurrence of part-time employment in Germany, the effects on wage rates are rarely studied. I therefore use GSOEP panel data from 1984 to 2010 and apply different econometric approaches and definitions of part-time work to measure the so-called part-time wage gap of both, men and women. A very robust finding is that part-time working men are subject to higher wage cuts than women. The specification accommodating all available information and the biasing effect of unobserved individual characteristics yields a wage cut of about 10 percent in West and East Germany. Furthermore, the type of contract makes a big difference. While marginal employees own lower wage rates, irrespective of region and sex, female part-time employees covered by social security have no significant drawback once differences in firm and job characteristics (in OLS regressions) or individual fixed-effects (in panel regressions) are taken into account. The results also reveal that work experience in part-time employment generates no positive returns, implying that reduced working hours do not only cause short-term effects. Another novel of my study is the look at the part-time wage gap over time. While there are good reasons to believe that the part-time wage gap shrinks, the empirical evidence reveals that wage differentials in West-Germany increased over time. This finding also surprises in light of the supposition that the wage penalty tends to be lower in times when part-time work is widespread and employers get accustomed to alternative working time schemes.