Junior research group “Time policy – how can social policy help to manage critical phases over the life course?”

Current Project

Department

Public Economics

Project Management

Kai-Uwe Müller

Project Period

April 1, 2017 - October 31, 2019

Funded by

Federal Ministry of Labour and Social Affair, funded within the Network for Interdisciplinary Social Policy Research (FIS)

The research group is concerned with time policy as one element of social policy. Time policy allows individuals and households to cope with time conflicts during critical phases in their employment biographies. Time policy includes measures and benefits that enable employees to use their time resources according to their preferences, irrespective of their income. We identify critical phases in work biographies and analyze individuals’ and households’ decisions and other factors that influence time arrangements. Preferences are distinguished from restrictions and other factors beyond the scope of social policy. A particular focus is put on welfare state policies that fulfill time policy functions. We analyze existing policies as well as various reform options.

The research group follows a multi-disciplinary approach. This is mirrored by two PhD students, one with a background in economics and one with a background in sociology. The common element is a quantitative empirical approach based on various representative micro data sets. In addition, qualitative methods may be used where quantitative data is not available. Theoretical and methodical strengths of both disciplines are combined: based on micro-econometric methods we analyze causal effects of different time policies on time-use decisions. First, we exploit quasi-experimental variation with modern evaluation methods to identify causal effects of existing policies. Second, we analyze the empirical relationships and mechanisms of interest on the basis of structural behavioral models.

Empirical research projects on time conflicts and time policies are defined in the following four subject areas:

(1) time conflicts of parents with small children;

(2) working time flexibility over the life course;

(3) gainful employment and care work – private care and care time regulations;

(4) flexible transitions into old-age pension.

DIW Team

Exemplary research projects from different modules

More or less? Desired and actual working hours among parents with small children (PDF, 257.48 KB)
(Kai-Uwe Mülle, Michelle Harnisch, Michael Neumann)

In this project we investigate whether desired working hours of parents with small children deviate from their actual hours of work. It is not true that women generally prefer to work longer hours of work and men would like to reduce their working hours in this phase of their life. Working time preferences are primarily determined by actual hours worked. We show differences according to individual and household characteristics and compare the situation in Germany with other countries. We also analyze causes for deviations between desired and actual hours of work. Besides insufficient supply of adequate childcare, working time restrictions within firms also play a significant role.

What helps and what hinders? Exploring the role of workplace characteristics for parental leave use and its career consequences with a mixed-methods design
(Claire Samtleben,Julia Bringmann, Mareike Bünning, Lena Hipp)

Despite considerable policy efforts, the division of parental leave among couples today still is unequal. As workplaces are highly gendered institutions, we seek to understand this limited policy effectiveness by examining how workplace characteristics relate to fathers’ uptake of parental leave and to the length of leave they take. Moreover, we analyze the perceived career consequences of leave taking among those fathers who took leave and compare these retrospective assessments to those of mothers. By drawing on a combination of quantitative and qualitative data collected on different-sex couples in Germany in 2015, we show that the fear of professional repercussions and the lack of a replacement at work inhibit fathers from taking leave or taking leave for more than two months. Both, fathers and mothers were more likely to experience negative career consequences if they worked in organizations in which a strong ideal worker norm prevailed.

Does subsidized care for toddlers increase maternal labor supply? Evidence from a large-scale expansion of early childcare (PDF, 0.91 MB)
(Kai-Uwe Müller, Katharina Wrohlich)

Expanding public or publicly subsidized childcare has been a top social policy priority in many industrialized countries. It is supposed to increase fertility, promote children's development and enhance mothers' labor market attachment. In this paper, we analyze the causal effect of one of the largest expansions of subsidized childcare for children up to three years among industrialized countries on the employment of mothers in Germany. Identification is based on spatial and temporal variation in the expansion of publicly subsidized childcare triggered by two comprehensive childcare policy reforms. The empirical analysis is based on the German Microcensus that is matched to county level data on childcare availability. Based on our preferred specification which includes time and county fixed effects we find that an increase in childcare slots by one percentage point increases mothers' labor market participation rate by 0.2 percentage points. The overall increase in employment is explained by the rise in part-time employment with relatively long hours (20-35 hours per week). We do not find a change in full-time employment or lower part-time employment that is causally related to the childcare expansion. The effect is almost entirely driven by mothers with medium-level qualifications. Mothers with low education levels do not profit from this reform calling for a stronger policy focus on particularly disadvantaged groups in coming years.

Labor supply under participation and hours constraints. An extended structural model for policy evaluations
(Kai-Uwe Müller, Michael Neumann, Katharina Wrohlich)

The paper extends a static discrete-choice labor supply model by adding participation and hours constraints. We identify restrictions by survey information on the eligibility and search activities of individuals as well as actual and desired hours. This provides for a more robust identification of preferences and constraints. Both, preferences and restrictions are allowed to vary by and are related through observed and unobserved characteristics. We distinguish various restrictions mechanisms: labor demand rationing, working hours norms varying across occupations, and insufficient public childcare on the supply side of the market. We apply the empirical framework to evaluate an in-work benefit for low-paid parents in the German institutional context. The benefit is supposed to increase work incentives for secondary earners. Based on the structural model, we are able to disentangle behavioral reactions into the pure incentive effect and the limiting impact of constraints at the intensive and extensive margin.

Identifying and Estimating Beliefs from Choice Data – An Application to Female Labor Supply
(Ulrich Schneider)

This paper investigates the life cycle costs of biased beliefs of future employment possibilities, focusing on females who experience child-related career breaks. To estimate these costs, I develop a novel strategy to identify expectations of employment prospects within a life cycle model of female labor supply and human capital accumulation. Reactions to a discontinuity in the future expected value of non-employment caused by the end of employment protection allows for identification of expectations. In addition, reforms that exogenously vary the length of this protection period allow to separately identify expectations, job-arrival rates, and preferences individually. In line with suggestive evidence, the estimated life cycle model indicates that expectations are substantially biased: on average women expect the half-yearly job arrival rate to be 66% higher than the actual rate. This overconfidence prolongs the average child related career break by eight months, resulting in a larger share of mothers staying non-employed beyond the protection period. The implications of forgone wages and human capital are large, since overconfidence decreases life-time earnings from employment by 14%.

Housework, care or career? Could a more equal distribution of unpaid work within couples enhance women’s labor market attachment?
(Claire Samtleben, Kai-Uwe Müller)

The paper contributes to the empirical literature on the effects care and housework have on labor market outcomes. In contrast to previous studies we include the partner dimension into the empirical analysis and investigate the consequences of the amount and within-household distribution of unpaid work. We address the question whether a redistribution of housework duties could further enhance labor market equality. We distinguish time constraints on participation and working hours from indirect consequences for wages and their combined effect on earnings A theoretically convincing set of instrumental variables (partially based on exogenous policy reforms) makes a causal interpretation of our estimates more credible. We apply recent and longitudinal data from the German SocioEconomic Panel matched with regional data on external child- and elderly care and combine the IV approach with individual and time fixed effects estimation. We also assess effect heterogeneity contrasting (in)flexible and (in)frequent tasks and check to what extent the same mechanisms are relevant for men.

Also on Sundays, Women Perform Most of the Housework and Child Care (PDF, 86.6 KB)
(Claire Samtleben)

Paid and unpaid work are still distributed very unequally between men and women in Germany. Regardless of time restrictions imposed by gainful employment, there is a gender- specific gap in time spent on housework and child care (gender care gap). The total volume of paid and unpaid work on weekdays is roughly the same for men and women (approx. 11 hours), although women perform more unpaid and men more paid work. Also on Sundays, women spend an average of 1.5 hours more on unpaid work, even though almost no gainful work is done—neither by women nor men. In households with children—especially, young children—the gender care gap is particularly wide. Since the unequal distribution of paid and unpaid work negatively affects the financial situation of women, policy measures which support women’s participation in the labor market and encourage men’s participation in housework and child care are important. An example of the latter would be the extension of partner months for the parental leave benefit.

Identification of Time Preferences in Dynamic Discrete Choice Models
(Ulrich Schneider, Peter Haan, Luke Haywood)

We estimate a dynamic life-cycle model of labor supply with a focus on time preferences for women. We extend the dynamic discrete choice model to accommodate potentially non-exponential discounting. Variation in job protection regulations provides identifying variation to test time discounting, affecting future and not current payffs. Reforms to job protection legislation in Germany constitute a natural experiment to identify the key time preference parameters of our model. We shed light on the importance of time-inconsistent preferences on maternal labor market return. The structure of time preferences will importantly affect cost and effectiveness of labor market policies.

(Re-)Evaluating the effects of the legal claim for part time on individual employment outcomes with administrative data
(Kai-Uwe Müller, Sascha Drahs)

Hours constraints play an important role in the determination of actual hours worked by employees. Especially during critical life phases, in which care work for children or elderly parents may exert pressure on employees' time budgets, workers may want to change from full-time to part-time work. Using administrative individual level employment records from Germany, I first provide evidence that the prevalence of part-time work is extremely heterogeneous and concentrated among female employees at the beginning and towards the end of the career. In a second step, We use a reform in 2001 that introduced a legal right to work part-time for employees in sufficiently large firms. We use this reform as a natural experiment to derive the causal effect of a legal right to work part-time on work hours and subsequent employment probabilities.

Time to care? The effects of retirement on informal care provision
(Björn Fischer, Kai-Uwe Müller)

This paper analyzes the impact of women’s retirement on their informal care provision. Using SOEP data from the years 2001-2016 we address fundamental endogeneity problems by applying a fuzzy regression discontinuity design. We exploit early retirement thresholds for women in the German pension system as instruments for retirement. We find significant positive effects on informal care provided by women retiring from employment at the intensive and extensive margin that are robust to various sensitivity checks. Women retiring from full-time employment, highly educated women and women providing care within the household react slightly stronger. Findings are consistent with previous evidence and underlying behavioral mechanisms. They point to a time-conflict between labor supply and informal care. Policy implications are far-reaching in light of pension reforms that aim to increase life-cycle labor supply and therefore threaten to reduce informal care supply and to aggravate the existing excess demand for informal care.

Contact

Kai-Uwe Müller

Head of the FIS Junior Research Group Time Policy in the Public Economics Department