Part-time Employment by Firm Age, Size, and Productivity

In addition to the distribution of part-time employment in firms by growth rate, the model produces interesting results for the cross-section of firms which use part-time labor by firm size and age category, as displayed in Table 1.6. It is inter­esting to note that the part-time share is not monotone in size categories, with the largest and smallest firms utilizing more part-time labor. This is due to the entry and growth of large firms, and reflects the fact that these size categories are somewhat arbitrary. For example, firms in the range of 249-999 employees in the model move across size categories with large enough shocks. Looking at the part-time share of firms by permanent productivity level, we can see that part-time usage is roughly monotone and increasing in size except at the highest productivity. The variation seen in part-time usage across productivity levels comes partly from the heteroge­neous exit rates of firms, which affects the long-run size of a firm. If exit rates were constant across firms, average part-time usage would actually be decreasing in the firm’s permanent productivity level. Instead, it is increasing, since more productive firms also have much lower exit rates. This raises the future value of the firm, giving the firm more incentive to retain its current workforce through part-time work. Fix­ing the productivity level, part-time usage is increasing in age and reflects the fact that young, growing firms use less part-time labor.

Although the model can reproduce the qualitative properties of worker flow data and has testable implications for the usage of part-time employment over the distribution of firms, what is lacking is data on the patterns of hours adjustments or part-time usage of firms by age or size, both in the cross-section and over the business cycle. In future work, I plan to address this by documenting the hours and employ­ment adjustments at the firm-level in the Longitudinal Business Database, Census of Manufactures/Annual Survey of Manufactures, and Quarterly Plant Capacity Uti­lization Survey data from the US Census Bureau.