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124 Monthly Lab. Rev. 68 (2001)
Wage Differentials Associated with Flextime

handle is hein.journals/month124 and id is 288 raw text is: Wage differentials
associated with flextime
Analysis of the Current Population Survey indicates
positive wage differentials overall for women
on flextime in 1989 and for both men and women in 1997;
significant differentials emerge for selected motivations,
industries, and occupations

Bonnie Sue Gariety
and
Sherrill Shaffer
Bonnie Sue Gariety is
a former graduate
student in economics
at the University of
Wyoming, Laramie,
Wyoming. Sherrill
Shaffer is John A.
Guthrie Senior
Distinguished Professor
of Banking and
Financial Services,
Department of
Economics and
Finance, at the same
university.

his article presents an empirical test of
wage differentials associated with flextime,
by gender, stated motivation for using
flextime, industry, and major occupation. The test
implicitly compares the relative strengths of two
opposing effects: a negative compensating wage
differential resulting from workers' preferences
for flextime and a positive wage differential asso-
ciated with higher productivity of workers on
flextime attributed to what economists call the
efficiency wage hypothesis. Although previ-
ous studies have found evidence that flextime
increases both productivity' and workers' satis-
faction,2 scant evidence has emerged thus far re-
garding the net quantitative or qualitative impact
of these factors on equilibrium wages.
One exception is an article by Nancy Johnson
and Keith Provan,3 who applied a similar test to a
much smaller data set and found flextime to be
positively associated with wages for professional
women, negatively associated with wages for non-
professional women, and not significantly asso-
ciated with wages for men. Johnson and Provan's
sample totaled 258, obtained by survey from
within a single State. The study reported in the
current article, by contrast, uses nationwide
samples of more than 5,000 workers, obtained
from the U.S. Current Population Survey (cPs)
supplement, Multiple Job Holding, Flexitime, and

Volunteer Work, for 1989 and 1997. In addition
to estimating aggregate wage effects by gender
in each year, the article estimates the flextime wage
differential associated with specific reasons each
worker reportedly preferred flextime in 1989. (Rea-
sons for choosing flextime were not reported in
1997, preventing a comparison with that year.)
Also estimated is the flextime wage differential
associated with specific industries and specific
major occupations for 1997. (Again, in 1989, the
number of workers on flextime in particular occu-
pations and industries was too small to draw a
meaningful comparison with the later year.)
Results of the study indicate that flextime is
associated with significantly higher wages over-
all. The size of the flextime wage differential for
women is stable across the years 1989 and 1997
and is similar to the 1997 estimate for men. How-
ever, the 1989 flextime wage differential for men is
much smaller than in 1997 and is not significantly
different from zero. This finding suggests that
the pattern of compensation has evolved in a
similar direction for both male and female work-
ers, but it evolved later for men.
The more detailed regressions for 1989 find
that the only stated reason for desiring flextime
associated with a significant wage differential
among women is transportation. Among men,
flextime taken for personal reasons is associated

68  Monthly Labor Review  March 2001

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