Presenteeism at work and gender inequality

Ghazala Azmat, Lena Hensvik, Olof Rosenqvist 04 October 2020

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Recent academic discussion on the persistent gender inequality in the labour market has focused on the importance of parenthood (Ejrnæs and Kunze 2013, Angelov et al. 2016, Adda et al. 2017, Kleven et al. 2019). It is argued that mothers often suffer a wage penalty via foregone investments in human capital because of parental leave or part-time work (Altonji and Blank 1999, Manning and Petrongolo 2008). Responsibilities for children and the household may also induce women to move out of jobs that are well-paid because they require long hours or long commuting time (Goldin 2014, Cortés and Pan 2019, Le Barbanchon et al. 2019). 

Less attention, however, has been paid to the importance of unpredictable (temporary) work absence – or conversely, the importance of ‘presenteeism’ – in the workplace. Unpredictable absence due to own sick leave or leave to take care of sick children is often difficult for researchers to measure but can, nonetheless, pose important problems for firms. Production disruption and discontinuous drops in productivity are likely to occur in ‘unique’ jobs – i.e. if there are no, or few, close substitutes for the absent employee at the workplace. The lack of a substitute might be a feature of the firm, but it might also reflect the characteristics of a job. Whether a trait of an occupation or firm-specific, the importance of presenteeism for a given position suggests that flexibility, such as the possibility of staying at home with a sick child, is more difficult to accommodate. 

Our research highlights that both presenteeism and job uniqueness are rewarded in the labour market (Azmat et al. 2020). Unique jobs are higher paying, more stable, have better wage trajectories, and, at the same time, they also provide higher rewards for presenteeism. Using Swedish register data, we adopt an event study approach based on changes in within-couple gaps around the birth of the first child. We can measure absence and separately identify whether it is taken for oneself or to care for a sick child.

We find that while there are no gender differences in taking sick leave before the arrival of the first child, after the arrival, we see that women’s presence at work involves more uncertainty – due to a higher incidence of temporary work absence. Women are also more likely to switch into (lower paying) non-unique jobs relative to men. This gap persists even when the child is older, with important long-run wage implications – helping to explain the diverging career paths of men and women at the onset of childbearing. By around 15 years after the child’s arrival, parenthood reduces mothers’ likelihood of holding a unique job relative to fathers by approximately 6 percentage points (compared to the period before the arrival of the first child). Figure 1 plots the effect of parenthood on the within-couple gap in uniqueness. 

Figure 1 Effect of parenthood on the within-couple gap in uniqueness

  

Notes:  The figure shows the within-couple gap in uniqueness (father-mother) at a particular event time in Sweden. The first child is born at event time zero. Uniqueness is defined as having fewer than 6 coworkers in the same occupation. Our estimation methodology controls for time trends, within-couple differences in education, age and prebirth uniqueness.  

Our study highlights that firms’ internal organisation can play an immensely important role on the gender gap instigated by parenthood. We find that holding a unique job is not strongly driven by differences in seniority (i.e. holding a managerial position) but instead reflects differences across occupations and firms. The effect of parenthood on the gender gap in holding a unique job is much more (less) pronounced in firms or occupations where the penalty for absence is higher (lower), suggesting gender differences in sorting into and out of jobs that compensate differentially on the basis of the sensitivity of the productivity to presenteeism. 

In her pioneering paper, Goldin (2014) argued that closing the gender wage gap needed to involve changes in the structure of jobs, making firms less likely to reward long (or overtime) hours. Focusing on high-skilled professions, she argues that professions with more non-linear wage structures, such as law, have a larger penalty than those in professions with a more linear wage structure, such as pharmacy or medicine. Our results conform to this notion and highlight that dimensions such as the sensitivity of the productivity in a job to temporary unpredictable absence (or, alternatively, the importance of presenteeism), combined with disproportional wage penalties for absence in high-paying jobs, contribute to the gender earnings gap. 

Unlike parental leave and part-time employment, which allow the employer to anticipate the absence of the worker, temporal work absence – often due to own sickness or caring for sick children – is unpredictable. We focus on one form of substitutability – namely, when one works in a position where there are few or no close substitutes within the workplace. However, other forms of frictions related to temporal substitution might constrain employees in a similar way – for instance, working in a position with a great deal of individual autonomy or with incentives based on the employee’s own client list. 

An interesting aspect of the current crisis caused by the COVID-19 global pandemic is that it has – at least temporarily – decreased the presenteeism requirements of many jobs. There is a great deal of discussion on how this situation has affected the work-life balance within the household, especially when combined with school closures (Del Boca et al. 2020). Women seem to be more adversely affected than men because of an increase in household chores and caring for children, but also because of larger employment losses they have suffered compared with men (Alon et al. 2020). In the longer run, however, this crisis might actually help to reduce gender inequality. Over this period, many firms have invested a great deal in internal reorganisation because of the need to accommodate for working from home. While this reorganisation is likely to have come at a cost, by targeting the organisations’ structure in such a way that tasks are performed in a satisfactory way from home, it can make it less costly for those holding a unique job to not be present in the workplace. By changing the infrastructure in such a way that it reduces the penalty for an unpredictable absence (because of say, caring for a sick child), firms could thus inadvertently help to reduce the associated gender disparities it generates. 

References 

Alon, T, M Doepke, J Olmstead-Rumsey and M Tertilt (2020), “The impact of the coronavirus pandemic on gender equality”, VoxEU.org, 22 September.

Azmat, G, L Hensvik, and O Rosenqvist (2020), “Workplace Presenteeism, Job Substitutability and Gender Inequality”, CEPR Discussion Paper 14982.

Del Boca, D, N Oggero, P Profeta and M Rossi (2020), “Women’s work, housework, and childcare before and during COVID-19”, VoxEU.org, 19 June.

Adda, J, C Dustmann and K Stevens (2017), “The career costs of children”, Journal of Political Economy 125(2): 293–337.

Altonji, J G and R M Blank (1999), “Race and gender in the labor market”, Handbook of Labor Economics 3, pp. 3143–3259.

Angelov, N, P Johansson and E Lindahl (2016), “Parenthood and the gender gap in pay”, Journal of Labor Economics 34(3): 545–579.

Cortés, P and J Pan (2019), “When time binds: Substitutes for household production, returns to working long hours, and the skilled gender wage gap”, Journal of Labor Economics 37(2): 351–398.

Ejrnæs, M and A Kunze (2013), “Work and Wage Dynamics around Child Birth”, Scandinavian Journal of Economics 155(3): 856–877

Goldin, C (2014), “A grand gender convergence: Its last chapter”, American Economic Review 104(4): 1091–1119.

Kleven, H, C Landais and J E Søgaard (2019), “Children and gender inequality: Evidence from Denmark”, American Economic Journal: Applied Economics 11(4): 181–209.

Le Barbanchon, T, R Rathelot and A Roulet (2019), “Gender differences in job search: Trading off commute against wage”, Unpublished manuscript.

Manning, A and B Petrongolo (2008), “The part‐time pay penalty for women in Britain”, The Economic Journal 118(526): F28–F51.

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Topics:  Covid-19 Gender Labour markets

Tags:  COVID-19, presenteeism, gender wage gap

Professor of Economics, Sciences Po; Research Associate, Centre for Economic Performance, LSE

Professor, Uppsala University

Researcher, Institute for Evaluation of Labour Market and Education Policy (IFAU)

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