Working time flexibility and inequality


Badania porównawcze ujawniają dwie uderzające własności nierówności na rynku pracy: nierówności występują praktycznie wszędzie i zmieniają się bardzo powoli. Takich samych wniosków dostarczają nawet te analizy, w których nierówności nie są prostą miarą zróżnicowania zarobków: jeśli ludzie różnią się poziomem wykształcenia, zawodami i miejscem zamieszkania, pewnego zróżnicowania zarobków należy się spodziewać. Lecz jeśli uwzględni się te różnice, a płace nadal pozostają nierówne, rodzi się potrzeba zrozumienia natury tego zjawiska, by móc zaproponować skuteczne metody jego ograniczania. Jedno z potencjalnych wyjaśnień zaproponowała Goldin (2014): na niektórych stanowiskach wymagana jest znaczna doza dyspozycyjności. Pracownicy, którzy z różnych względów nie są w stanie sprostać temu oczekiwaniu uzyskują niższe wynagrodzenie, niż pozostali. Ograniczeniami w dyspozycyjności może być pełnienie funkcji opiekuńczych, ale także edukacja (np. wśród młodych pracowników) czy ograniczona sprawność fizyczna (np. wśród starszych pracowników lub osób z niepełnosprawnościami). Czy nierówności na rynku pracy mogą wytłumaczyć rozbieżności pomiędzy wymogiem dyspozycyjności po stronie pracodawcy i zdolnością do bycia dyspozycyjnym po stronie pracownika?

Since the seminal contribution of Goldin (2014), the literature on labor market  began to focus on how different time endowments affects inequality, mostly in terms of wages. It is possible to distinguish two effects. First, the direct effects, which are related to the non-linear relation between wages and working hours. This relation arises both from higher rewards to working long hours, but also from rewards to working specific hours, i.e. during the night when it is possible to cooperate with overseas partners. An indirect effect of such pattern is that workers will sort into different jobs not only according to their productivity, but  also due to their expected time availability. Expecting greater time constraints some workers might sort into occupations that provide lower returns to working long hours, at the expense of lower wages. The provision of flexible work arrangements, then, appears as a way to kill two birds with one stone: it could reduce labor market inequality and at the same time promote a more efficient allocation of resources.


Źródło finansowania | Financing: Narodowe Centrum Nauki, DAINA, joint with ​Vilnius University

Projekt realizowany | Timeline: 12/2018 -- 12/2021

Kierownik | Principal Investigator: Joanna Tyrowicz

Budżet łączny | Total budget: 554 453 zł

  • wynagrodzenia dla podstawowych wykonawców | compensation to researchers: 252 400 zł
  • stypendia dla młodych badaczy | scholarships for young scholars: 72 000 zł
  • komputery i oprogramowanie | hardware and software: 13 700 zł
  • konferencje i inne wyjazdy | conference travels: 26 700 zł
  • materiały, dane i usługi obce | data, usables and outsourced services: 50 543 zł
  • koszty pośrednie dla FAME | overheads for FAME: 107 110 zł

Goldin (2014, AER) argues that societies have made a remarkable progress in closing the wage and employment gaps in the last fifty years; yet, they have failed to achieve full labor market equality. Goldin boils down the remaining difference to the concept of time flexibility, which should be understood both from employee and the employer perspectives. For example, primary care givers have lower time endowment to allocate to market work. By the same token, groups disadvantaged due to remote location, disability etc. may be at disadvantage when compared to workers without such handicaps. While the conjecture of Goldin is attractive, empirical evidence is scarce and at times contradictory. In this project, we provide a battery of tests Goldin’s conjecture, analyzing the role of working time flexibility in determining wages and employment.

First, from an employee perspective, we hypothesize that demand for flexibility varies at different stages of the life-cycle. If the demand for flexibility indeed drives the (adjusted) wage gaps, then one expect a life-cycle pattern in adjusted wage gaps. In the absence of flexible arrangements, the demand for flexibility might also be reflected in more selective employment patterns. This hypothesis will be tested empirically, with the use of a novel proposed estimation method, which allows to isolate age, cohort and time effects in adjusted wage gaps. The study will be done for a wide variety of countries. Second, also taking the employee perspective, we will infer the true value of working time flexibility to workers. Non-standard work arrangements allow to engage in other spheres of life, but in many societies carry a social stigma. We will propose a large-scale framed field experiment to infer the true value of working time flexibility among workers, controlling for their outside options and household situation.

Third, from an employer perspective, we formulate the hypothesis that managers from a disadvantaged group will not tolerate high wage penalty on time inflexibility among their subordinates. To this end, we will develop and utilize a novel dataset on female managers across Europe and industry-level adjusted gender wage gaps (as well as their between firm dispersion). We will provide a variety of identification strategies to inspect the causality in this relationship.

Fourth, from a household perspective, taxes and social transfers may disproportionally tax the second earner’s labor supply, thus making it disadvantageous to supply labor. So may the childcare costs. We will extend a standard tax-benefit microsimulation model to account for the latter for a selection of the European countries, thus obtaining a shadow price of working time flexibility across countries. Finally, fifth, we will analyze the links between the supply of flexible work agreements and labor market inequality. We will explore ways flexible working arrangements influence labor market inequality across the EU, including selective patterns of employment, changes in within gender inequality and assortative mating.

The project contributes to the literature in three respects. First, we provide a wide battery of tests to an important hypothesis concerning the origins of labor market inequality in a wide, comparative context across countries. Second, we provide several methodological innovations (concerning estimation techniques and identification strategies) as well as methodological diversity (econometrics, simulations and experiments). Third, we will separate the role of the supply side factors (on the side of the employers) from demand side factors (the working time flexibility to combine personal and professional life).

The benefits of international cooperation are threefold. First, the teams complement each other in terms of skills, which permits pushing the frontier of research. Second, given the international composition of the team, the comparative economics angle can be based on local expertise on top of being data driven. Third, the capacity building for both partners will permit broader reach of this and future research in the field, thus contributing to the internationalization of Polish and Lithuanian science in our field.

The project is implemented in Polish-Lithuanian Cooperation. The Lithuanian partners come from Vilnus University.

Romas Lazutka

Romas Lazutka, who specializes in sociology of inequality and will lead the Lithuanian team. 

Jekaterina Navickeis in the Department of Sociology at the University of Vilnius and a member of the EUROMOD consortium. In the project she will extend the EUROMOD tool to comprise the costs of child rearing.

Jekaterina Navicke

Linas Tarasonis

Linas Tarasonis  is vice dean at the Faculty of Economics and Business Administration of Vilnius University and works as at the Bank of Lithuania. His work on the project focuses on accounting for employment selectivity in estimating the wage gaps between men and women.


Meeting 1: Warsaw, February 25-26th, 2019

All the team members met for two days of fruitful discussions and kick-starting the joint work. We established the labor division and preliminary schedules for the two joint studies. We also presented the current stage of research in the studies implemented by each of the two teams. The next meeting was set to August in Vilnus.

Meeting 2: Vilnus, August 22nd-23rd, 2019

In lovely weather and beautiful surroundings of Vilnus, the team met to discuss the progress on the work packages and start the preparation for our jointly organized conference GenderGaps. In particular, the Polish team presented the progress on the paper exploiting the scope of statistical discrimination among labor market entrants. The Lithuanian team informed about the great administrative data that could be used for the greatest research on gender differences in wage bargaining ever, stay tuned! We will soon meet again during EALE 2019 where both Lithuanian and Polish teams present research related to this project. Things look really smooth. The next meeting was set to early 2020 in Warsaw.

Meeting 3: Warsaw, February 2020

Opublikowane | Published

  • All on board? New evidence on board gender diversity from a large panel of firms | European Management Journal

    Using a unique database of over 20 million firms over two decades, we examine the industry sector and national institution drivers of the prevalence of women directors on supervisory and management boards in both public and private firms across 41 advanced and emerging European economies. We demonstrate that gender board diversity has generally increased, yet women remain rare in both boards of firms in Europe: approximately 70% have no women directors on their supervisory boards, and 60% have no women directors on management boards. We leverage institutional and resource dependency theoretical frameworks to demonstrate that few systematic factors are associated with greater gender diversity for both supervisory and management boards among both private and public firms: the same factor may exhibit a positive correlation to a management board, and a negative correlation to a supervisory board, or vice versa. We interpret these findings as evidence that country-level gender equality and cultural institutions exhibit differentiated correlations with the presence of women directors in management and supervisory boards. We also find little evidence that sector-level competition and innovativeness are systematically associated with the presence of women on either board in either group of firms.