Nonwage attributes, gender, and the future of work

Project Information

MORETHANMONEY

Grant agreement ID: 101086717

DOI

10.3030/101086717

EC signature date 9 October 2023

Start date 1 January 2024

End date 31 December 2028

Funded under

• European Research Council (ERC)

Total cost

€ 1 566 010,00

EU contribution

€ 1 566 010,00

Coordinated by

UNIVERSITY OF HAMBURG
Germany

Periodic Reporting for period 1 - MORETHANMONEY (Nonwage attributes, gender, and the future of work)

Reporting period: 2024-01-01 to 2026-06-30

Summary of the context and overall objectives of the project

Labour markets are currently undergoing rapid changes with respect to non-pecuniary attributes of work. Work flexibility (defined as being able to telework and determine one’s own work schedule) and part-time work have increased considerably. We are beginning to understand that these changes will alter labour markets permanently. Since the Covid crisis, another non-pecuniary aspect has received a lot of public attention: meaning of work, defined here as the ability to positively influence society through one’s work. It has become clear that certain jobs, like those of nurses and childcare workers, are essential for society, but they often are remunerated less than other jobs. Recent changes in the valuation of nonwage attributes relative to wages may also be an explanation for the present low labour supply that causes labour shortages in certain sectors. Looking to the future, the richer societies are, the more workers value these nonmonetary aspects of work relative to wages.

MORETHANMONEY investigates the impact of nonwage attributes on the labour market and the future of work. It integrates flexibility and work meaning into the theory and empirics of family labour supply and retirement choices. I collect unique data sets that combine administrative, survey and experimental parts, and use structural and reduced-form estimation techniques. Thus, I build a bridge between the different literatures, not only regarding topics, but also regarding different methods (structural versus reduced form) and types of data (experimental versus observational) that are specific to these literatures.

In the labour and behavioural economics literatures, there is by now a good understanding of short-term trade-offs that single individuals make. In three subprojects, I add new perspectives by

• analyzing the benefits of non-wage attributes in a family context (FAMILY),
• combining the labour economics literature that concentrates on work flexibility with the behavioural economics literature that focuses on meaning of work (FLEXMEAN),
• investigating the long-term effects of labour market trade-offs between wages and amenities on pension incomes and in particular gender gaps in pension incomes (LONG-TERM).

Work performed from the beginning of the project to the end of the period covered by the report and main results achieved so far

FAMILY: To investigate the family dimension of flexibility choices, we have added flexibility to a structural model of parental labour supply. Parents choose labor supply and investments into two public goods, children’s well-being and other household work. Parents are allowed to differ in their preferences. To bring the model to the data, we need extensive information on time use and consumption inside households, and on spouses’ wages and job flexibility levels, as well as instrumental variables for the latter. We have collected this information in the form of a unique data set that is representative of Dutch couples with children. The results have been summarized in the paper “25 hours in a day: On job flexibility and the intra-household allocation of time and money”.

FLEXMEAN: To integrate the labour and behavioural economics literature, we have collected data on trade-offs between wages, meaning, and flexibility in Germany, the Netherlands, and the US. Based on ISPP data, we were able to estimate trade-offs between flexibility and meaning for a sample of almost fourty countries. The results were summarized in the papers “Work meaning and the flexibility puzzle” (published in the Journal of Labor Economics) and “Work meaning and fair wages” (published in Labour Economics).

LONG-TERM: We want to investigate the long-term effects of current trade-offs between wages and amenities. To do that, we designed a discrete choice experiment to measure current trade-offs. We include three experimental treatments: one control treatment; one salience treatment in which we investigate whether the valuation for amenities changes when the trade-off with pension income is made salient; and one information treatment in which respondents are informed about the size of the effect that current wage changes have on pension incomes. Our data collection is based on two true probability samples of the Dutch population.

Progress beyond the state of the art and expected potential impact (including the socio-economic impact and the wider societal implications of the project so far)

Preliminary results:

FAMILY: Recent literature has shown that increasing job flexibility may allow parents to combine work and family life. Our analysis goes further than investigating time constraints by investigating the effect of flexiblity on children’s well-being. The results indicate that more job flexibility for fathers may help parents to balance work and family, they imply that more job flexibility for mothers may not allow parents to achieve the same. The overall implications for children’s well-being appear negative, albeit limited.

FLEXMEAN: We contribute to the literature by providing evidence that the flexibiliy puzzle exists across many countries. We find that women and parents value flexibility more but do not work more flexible jobs. The gender dimension of this flexibility puzzle is related to differences in meaningful work, which women value higher and sort into, at a significant price in terms of reduced flexibility. The parental dimension is connected to preferences for meaning and flexibility diverging after childbirth. Counterfactuals show that making meaningful jobs more flexible reduces the gender gap in total compensation by almost a quarter.

LONG-TERM: Long-term effects of wage-amenity tradeoffs are completely understudied, even though gender pension gaps are much larger than wage gaps. We show that women indeed value amenities more than men. Beliefs about the effect of wage changes on pension income do not show large gender differences. However, women maker bigger changes to their choices than men when reminded or informed about the effects of current choices on pension income. Our results show that the trade-off between wages and amenities is not immutable. There may be scope for policymakers to better inform women about the future consequences of their current choices. Our findings suggest that providing information on pension income can be an effective tool to reduce the gender gap.

Impacts:

I have presented the results at numerous academic conferences and invited seminars; taken public outreach activities in the form of podcasts, articles for non-expert audiences, and newspaper articles; offered seminars for students about the central themes of MORETHANMONEY; and initiated a Special Issue on Non-montary Aspects of Work for Labour Economics.