Tuesday, February 22, 2011

Does part-time employment increase firm productivity?

In many countries, encouraging part-time work is seen as a way to reduce unemployment, as the a job is split among several people, and as a way to keep mothers on the job and thus preventing loss of human capital. Firms do not like these policies because they perceive that part-time workers are less productive due to the time lost during the daily settling in routine and the transitions between shifts. However, some argue that shorter work time allows workers to work more intensely.

Annemarie Nelen, Andries De Grip and Didier Fouarge look at this from the firms' perspective and sift through the evidence using records from the Dutch pharmacy sector. By estimating production functions, they find that part-time work in fact increases productivity. The reason is that part-time workers allow the firm to allocate labor where is the most urgently needed, for example during lunch breaks or to fill the difference between opening hours and work hours. So, at least in the retail sector, part-time work is a benefit. I wonder though about manufacturing and office work.

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