Non‐Standard Time Wage Premiums and Employment Effects: Evidence from an Australian Natural Experiment
| DOI | http://doi.org/10.1111/bjir.12412 |
| Published date | 01 March 2019 |
| Date | 01 March 2019 |
| Author | Serena Yu,David Peetz |
British Journal of Industrial Relations doi: 10.1111/bjir.12412
57:1 March 2019 0007–1080 pp. 33–61
Non-Standard Time Wage Premiums
and Employment Effects: Evidence from
an Australian Natural Experiment
Serena Yu and David Peetz
Abstract
We examine the eect of increasing Sunday wage premiums on retail industry
employment in Australia, exploiting a quasi-experimental policy change across
two neighbouring states. Using both aggregate and individual-level data, we
adopt a dierence-in-dierence regression framework to estimate the causal
impact of the policy change on employment outcomes. We find no evidence of
changes in the total number of employees, and no eect on hours per employee
in the years following the policy implementation. However, there appeared to
be a decline in hours per employee in the announcement year of the policy
change.Overall, it appears that in an industry dominated by part-timeand casual
employment, any adjustment to the new Sunday wagerates occurred principally
through flexibility in hours, rather than in the number of employees.
1. Introduction
One of the major themes in recent industrial relations research, and a focal
point of policy debate, has been the time of work, in particular how it
intersects with the non-work activities of workers. The phrases ‘work–family
balance’ or ‘work–life conflict’ have been used to describe core issues involved.
Significant research attention has been paid to the role of job characteristics,
including long working hours and hours-related preferences. The timing of
work, atnon-standard hours and particularly on weekends, has been relatively
understudied. Corporate policy makers meanwhile have sought to encourage
firms to be more ‘flexible’ or ‘accommodating’ towardsemployees, and unions
and public policy makers have tended towards regulation — either by banning
work atcertain times or above a certain number of hours within a time period,
Serena Yu is at the Centre for Health Economics Research and Evaluation, University of
TechnologySydney. David Peetz is at the Centre forWork, Organisation and Wellbeing,Grith
University,Brisbane
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2018 John Wiley& Sons Ltd.
34 British Journal of Industrial Relations
or by forcing employers to pay a premium for work in non-standard times.
Such restrictions or obligations are not new. Part of the push for greater
labour market flexibility over the past three decades in many countries has
involved the easing or removal of such restrictions or obligations, to promote
employment growth.
While movements in the opposite direction have been rare of late, an
important one occurred in New South Wales (NSW), the most populous
state in Australia, from 2010 to 2015. As a result of a legislatively driven
‘award modernization’ process that standardized employment conditions
within an industry across the country, non-standard time premiums for
working Sundays in retail trade (one of the largest employing industries)
rose significantly there. At the same time, no change was required in the
second largest and adjacent state, Victoria. This provided the basis for
an important natural experiment, comparing outcomes in the two states.
Employers anticipated major employment losses; unions major gains for
employees.
We examine the eects of increasing Sunday premiums on employment
outcomes — number of employees, hours per employee and the likelihood
of working on Sundays — taking advantage of this natural experiment. By
using Victoria as a counterfactual, and controlling fora range of state-specific
factors, we isolate the eects of the rising Sunday premiums in NSW. We thus
address whether there were adverse eects on employment levels in NSW, or
on the distribution of employment through the week. We thereby consider
whether regulation of working time through public policy has a valid role to
play in influencing work–life conflict.
2. Time, work and pay
Of all resources available to us, time is the one that becomes unavoidably
scarcer. While real GDP per capita grows, the number of hours in a week
remains fixed. At the heart of the debate on non-standard hours premiums is
how individuals, families and society value their time and choose to allocate
it. The choice between wage-earning work, household work and leisure time
depends not only on preferences and needs (and that of one’s family), but
also on employment conditions including the wage rate. Work–life conflict
results from demands placed on individuals with work and non-work roles
and obligations. Interdisciplinary research has identified time-based pressure
as a primary determinant of work–life conflict, pressures which include long
working hours, schedule inflexibility and shift/overtime requirements (Byron
2005; Ford et al. 2007; Greenhaus and Beutell 1985; Michel et al. 2010).
While these studies have been concentrated in psychology and sociology, the
economic aspects of when we work have been understudied (Hamermesh
2016). Yet, the assumed growing demand for round-the-clock production and
consumption — and an attendant workforce — is said to produce productivity
and eciency benefits for employers, and benefits for those workers who
C
2018 John Wiley& Sons Ltd.
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