does flexible employment pay? european evidence on the wage perspectives of female workers

DOES FLEXIBLE EMPLOYMENT PAY? EUROPEAN EVIDENCE ON THE WAGE PERSPECTIVES OF FEMALE WORKERS

NEUJOBS WORKING PAPER NO. D16.3

Iga MagdaMonika Potoczna

Agenda

• Motivation & research questions• Literature review• Methods • Data• Results– Gender pay gap from a cohort perspective– Temporary employment and wages– Part time work returns - a premium or penalty?

• Conclusions & policy implications

1. Agenda2. Motivation & research

questions2. Literature review3. Methods4. Data5. Results6. Conclusions

Motivation

• Increase in female labour market participation– Age heterogeneity, rising employment of older

cohorts • Changing nature of jobs– Structural changes on the labour market– Increase in the use of new, flexible forms of

employment– Rising wage differentials



Research questions & hypothesis

• Size and the distribution of gender pay gaps:– linking the countries, cohorts and different parts

of wage distribution perspectives?– using detailled firm/workplace level data

• Flexible employment contracts– What are the wage returns among women?– Do they pay differently for women in different

countries, cohorts & at different points of wage distribution?



Literature review

• Gender pay gaps and age:– Increasing along with age, lowest/ zero on entry to the labour market

(Manning & Swaffield (2008); a ‘motherhood penalty’ effect– ‘glass ceiling’ and ‘sticky floor’ effects, heterogeneity

• Temporary contract and wages:– most empirical studies evidence a wage premium for permanent jobs

(Jimeno & Toharia, 1993; Davia & Hernanz, 2004),– premium is usually higher for men than women (Booth, Francesconi,

& Frank, 2002; Stancanelli, 2002; Hagen, 2002) and lower for older workers (Kahn, 2013, Blanchard & Landier 2003).

• Part-time work and wages:– a wage penalty usually found for women (Gregory & Connolly, 2008),– Booth & Wood (2008) find a part time wage premium in Australia for

men and women, Hirsch (2005) finds significant part time pay gaps for men only.



Methods

• Quantile regression models separately in four age groups: 20-29, 30-39, 40-49, 50-59 for 10th, 25th, 50th, 75th and 90th percentiles in each age group (+ sensitivity analysis)

• Two sets of estimations based on: (1) total sample for gender pay gap (2) sample restricted to women for temporary contracts and part-time effects on wage.

• logarithm of average gross hourly earnings regressed on a set of controls: gender, educational attainment, occupation, length of service, type of contract, part-time work, sector of firm economic activity (nace) and firm size.



Data

• European Structure of Earnings Survey, 2006 wave• 17 EU countries: Czech Republic, Germany, Spain,

Finland, France, Greece, Hungary, Italy, Lithuania, Latvia, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, United Kingdom

• Total: 10 364 150 observations



GPG: large heterogeneity in the size and age patterns



• Large age differences only in UK, NL & DE; small- LT & LV-> large GPG among young women

• GPG increases with age, but often till 40-49 only – participation effect?

• NMS more likely to have high GPG for young workers

Wage distribution & age1. Agenda2. Motivation & research


Sticky floor and age Glass ceiling and age

• ‘sticky floor’ effect lower for young women • young women in the CEE more likely to face a glass ceiling

Temporary employment and women’s wages



• permanent job premium decreasing with age (Blanchard & Landier, 2002) confirmed for only a few countries (DE NO, SK, UK); PL & HU – clear contrast

• larger premia in CEE

Temporary employment and wages

Age:• Temporary wage penalties relatively higher among young

women in WE, but not in most of NMS

Bottom & top of the wage distribution• wage premia attached to permanent contracts: much higher

among the top female earners, which stands in contrast to previous studies in the literature (Mertens et al., 2007); also in LV, FR, GR

• High also for the low paid women in DE



Part time work wage returns among women



In most EU countries PT female workers penalized in terms of wages they receive

Part time work wage returns among women

• Part time pay gaps slightly lower among the bottom earners (labour supply decisions, reservation wages)

• High-earning women working part time are much more likely to enjoy higher hourly wages (ceteris paribus), compared to lower paid colleagues – negative, but smaller in size (e.g. UK, LT) or positive (most countries)

• Older women working PT more likely to exhibit a wage penalty compared to younger ones (RO, LT, DE – exceptions)



What happens at the lower and upper end of the wage distribution?

Conclusions

• large heterogeneity of GPG and flexible employment wage returns for women depending on their age and levels of earnings

• CEE women more likely to experience higher pay gaps already early in the working careers– More school-to-work transition difficulties?– Earlier childbearing and its impact?

• increase in GPG with age and decrease in the oldest cohorts:– Institutional determinants?– Likely to increase with pensions age equalization



Conclusions

• Flexible employment forms appear a rather mixed blessing:– FTC and PT jobs offer a wage penalty in great majority of

countries– the question on compensation remains open– Several cases for in depth investigation of the institutional

setting• low paid older women in FR and young in DE (large FTC wage gap), older

well paid women in the UK (high wage FTC premium)• PT wages in HU• FTC wage penalty increasing with age in PL and HU



Policy implications?

• the complexity of challenges relating to female labour market opportunities

• women at different ages experience very different problems and labour market outcomes, even within the same countries - > a set of age-specific, targeted policies

• more in depth studies on the drivers of the various age-specific gaps:– Institutions - age-specific legal solutions, related to e.g. pensions or maternity

policies matter– linkages to changes in female labour market participation

• important for the discussion of the role of FTC & flexible employment



Thank you for your attention

[email protected]

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