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Fringe benefits and the demand for part-time workers

Thomas Buchmueller ()

Applied Economics, 1999, vol. 31, issue 5, 551-563

Abstract: In the US, tax code nondiscrimination rules and other institutional constraints require employers to offer the same fringe benefits to all full-time workers, but allow them to deny benefits to part-time workers. As a result, firms that offer generous fringe benefits to higher skill workers have an incentive to hire lower skill workers on a part-time or contingent basis. This paper uses cross-section establishment data to investigate the effect of employer-provided fringe benefits on the demand for part-time workers. The results indicate that firms that offer more generous fringe benefits make greater use of low wage part-time workers; there is no significant relationship between fringe benefits and the proportion of high wage workers employed part-time.

Date: 1999
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