How Important are Flexibility and Meaningful Work in the Labor Market?

Photo: UHH/Esfandiari Iris Kesternich
Photo: UHH/Esfandiari Iris Kesternich
What incentives outside of remuneration motivate people to work? Are these different for men and for women? Iris Kesternich from Universität Hamburg is addressing these and other questions in a new research project. Her work has been granted a Consolidator Grant from the European Research Council (ERC) for the next 5 years.

The jobs market has changed drastically over recent years, not just because of the corona pandemic, but also as a result of new digital technologies and increased labor shortages. One result of these changes is that employers are competing to create incentives beyond remuneration in order to attract qualified applicants. As part of her Morethanmoney research group, Iris Kesternich wants to examine the importance of flexibility and meaningful work in the labor market.

-In surveys, women in particular indicate that flexibility and meaningful work are important to them. They are more willing than their male counterparts to accept a lower salary in return for these advantages. That may also explain the persistent gender wage gap between men and women,- explains Kesternich who holds a nuclear professorship as part of the Excellence Strategy at Universität Hamburg. The family aspect is particularly important here, as the desire for flexible working hours and teleworking is especially important for women with children. In an initial project, Kesternich is investigating how flexibility affects the supply of women and men in the labor market, and how much time they spend with their children as well as the effects this has on the power structure within the family. -There is a lot of political discussion at the moment that women should be given greater flexibility, but what happens when their comparatively lower income results in them losing their negotiating power at home? That could be an unintended consequence of such policy decisions,- finds Kesternich.

In a second subproject, she is working to combine two previously independent research perspectives into a single model: that of -flexibility- from the labor economic perspective, and -meaningful work- from the field of behavioral science. Professions with a higher societal value, such as in child-care and nursing, are traditionally performed by women. They are however often the professions with less flexibility, a teacher or a nurse cannot simply come late to work because their child is ill. Kesternich is using new data to check her premises, that this pursuit of -high societal value- profession limits womens- flexibility when they need it the most, e.g., when they have small children.

In a third subproject, she is then analyzing the long-term effects of the choice of profession for men and women. -The differences in wages between women and men are often looked at, but not the differences in pensions. However, these are much more significant than the differences in wages in almost every state.- In seeking to change that, she will collect data on the trade-offs between wages and flexibility, in order to analyze their effects on retirement decisions over an individual’s working life.

If her assumptions that women really do choose a profession based on flexibility over pay are validated, this may help clarify the discrepancies that exist between genders in pension and retirement. -Insofar as only income is reflected in pension allowances and non-financial factors are not considered, women should give more weight to the effects of their decisions with regard to their income in retirement.-

Kesternich, as professor for economics with a focus on empirical health economics, has been granted €1.5 million in