DOES FLEXIBLE EMPLOYMENT PAY? EUROPEAN EVIDENCE ON THE WAGE PERSPECTIVES OF FEMALE WORKERS NEUJOBS WORKING PAPER NO. D16.3 Iga Magda Monika 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. Agenda 2. Motivation & research questions 2. Literature review 3. Methods 4. Data 5. Results 6. 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 1. Agenda 2. Motivation & research questions 2. Literature review 3. Methods 4. Data 5. Results 6. Conclusions

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? 1. Agenda 2. Motivation & research questions 2. Literature review 3. Methods 4. Data 5. Results 6. Conclusions

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. 1. Agenda 2. Motivation & research questions 3. Literature review 4. Methods 5. Data 6. Results 7. Conclusions

Methods Quantile regression models separately in four age groups: , 30-39, 40-49, 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. 1. Agenda 2. Motivation & research questions 3. Literature review 4. Methods 5. Data 6. Results 7. Conclusions

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: observations 1. Agenda 2. Motivation & research questions 3. Literature review 4. Methods 5. Data 6. Results 7. Conclusions

GPG: large heterogeneity in the size and age patterns 1. Agenda 2. Motivation & research questions 3. Literature review 4. Methods 5. Data 6. Results 7. Conclusions Large age differences only in UK, NL & DE; small- LT & LV-> large GPG among young women GPG increases with age, but often till only – participation effect? NMS more likely to have high GPG for young workers

Wage distribution & age 1. Agenda 2. Motivation & research questions 3. Literature review 4. Methods 5. Data 6. Results 7. Conclusions Sticky floor and ageGlass 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 1. Agenda 2. Motivation & research questions 3. Literature review 4. Methods 5. Data 6. Results 7. Conclusions 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 1. Agenda 2. Motivation & research questions 3. Literature review 4. Methods 5. Data 6. Results 7. Conclusions

Part time work wage returns among women 1. Agenda 2. Motivation & research questions 3. Literature review 4. Methods 5. Data 6. Results 7. Conclusions 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) 1. Agenda 2. Motivation & research questions 3. Literature review 4. Methods 5. Data 6. Results 7. Conclusions 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 1. Agenda 2. Motivation & research questions 3. Literature review 4. Methods 5. Data 6. Results 7. Conclusions

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 1. Agenda 2. Motivation & research questions 3. Literature review 4. Methods 5. Data 6. Results 7. Conclusions

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 1. Agenda 2. Motivation & research questions 3. Literature review 4. Methods 5. Data 6. Results 7. Conclusions

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