Is There a Wage Cost of Balancing Family and Work? Evidence Using Matched Employer-Employee Data

Ariane Pailhé, Institut National d'Études Démographiques (INED)
Anne Solaz, Institut National d'Études Démographiques (INED)

We explore the possibility that workers pay a wage cost of benefiting from “family-friendly” measures provided by firms. Since, women are more likely to work in such family-oriented firms, it may be an additional determinant of the gender wage gap. We test the hedonic price theory according to which the wages should be lower in the firms that enable their employees to combine work and family, and try to measure the impact of these “family friendly” practices on the male and female wages. A French national matched employee-employer survey which gives a large description of various family benefits offered by employers (in kind, financial benefits, flexible scheduling). A negative relationship between wages and schedule flexibility is found. There is no wage penalty in companies that offer in kind and cash benefits. The Oaxaca-Ransom decomposition shows that the gender gap is partially explained by these family-friendly practices, used mainly by women.