Wages of Non-regular Workers: Compensation for employment insecurity and lack of work flexibility

Author Name TSURU Kotaro  (Faculty Fellow, RIETI) /KUME Koichi  (Nagoya University of Commerce and Business) /OHTAKE Fumio  (Osaka University) /OKUDAIRA Hiroko  (Okayama University)
Creation Date/NO. February 2013 13-J-003
Research Project Reform of Labor Market Institutions
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We examine survey-based evidence on the desired wage compensation of non-regular workers in response to employment insecurity and work flexibility. Comparing the compensation rate by work status, contract workers ask for the highest rate for employment insecurity while part time workers ask for the highest rate for work flexibility. We investigate the determinants of the compensation. Female, aged (over age 50), and risk averse workers are likely to ask for more compensation. Non-regular workers who have experienced regular work or are looking for regular work ask for more compensation for job insecurity, while part time workers ask for more compensation for work flexibility. Estimating wage equations of non-regular workers shows that part time workers or married female workers received negative wage premiums, which can be interpreted as evidence consistent with work-life balance from the viewpoint of compensating wage differentials. The effect of job insecurity on wages is not clear.