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March, 2001, Vol. 124, No. 3

Wage differentials associated with flextime

Bonnie Sue Gariety and Sherrill Shaffer

This 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 associated with higher productivity of workers on flextime attributed to what economists call the "efficiency wage hypothesis." Although previous studies have found evidence that flextime increases both productivity¹  and workers’ satisfaction,²  scant evidence has emerged thus far regarding the net quantitative or qualitative impact of these factors on equilibrium wages.

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Footnotes

1 See John D. Owen, "Flexitime: Some Problems and Solutions," Industrial and Labor Relations Review, January 1977, pp. 152–160; Steven G. Allen, "An Empirical Model of Work Attendance," Review of Economics and Statistics, February 1980, pp. 77–87; D. R. Dalton and D. Mesch, "The Impact of Flexible Scheduling on Employee Attendance and Turnover," Administrative Science Quarterly, June 1990, pp. 370–87; and Edward M. Shepard, Thomas J. Clifton, and Douglas Kruse, "Flexible Work Hours and Productivity: Some Evidence from the Pharmaceutical Industry," Industrial Relations, January 1996, pp. 123–39.
2 Marni Ezra and Melissa Deckman, "Balancing Work and Family Responsibilities: Flextime and Child Care in the Federal Government," Public Administration Review, March–April 1996, pp. 174–79.

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