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Productivity and wage effects of “family‐friendly” fringe benefits

Reagan Baughman (University of Michigan, Ann Arbor, Michigan, USA)
Daniela DiNardi (Federal Trade Commission, Washington, DC, USA)
Douglas Holtz‐Eakin (Syracuse University, Syracuse, New York, USA)

International Journal of Manpower

ISSN: 0143-7720

Article publication date: 1 May 2003



Family‐supportive employment benefits have become increasingly popular in recent years as an employer response to the increasing labor force participation of women, and the consequent need to balance work and family life. Economic theory predicts that these types of fringe benefits could at least partially pay for themselves through a combination of increased productivity and lower wages. A survey of 120 employers in an upstate New York county provides data on benefits packages and outcome measures that are used to test this hypothesis. We find that employers who offer flexible sick leave and child care assistance experience measurable reductions in turnover. Employers who offer benefits like flexible scheduling policies and child care also appear to offset part of the cost of these benefits by paying lower entry‐level wages than do their competitors.



Baughman, R., DiNardi, D. and Holtz‐Eakin, D. (2003), "Productivity and wage effects of “family‐friendly” fringe benefits", International Journal of Manpower, Vol. 24 No. 3, pp. 247-259.




Copyright © 2003, MCB UP Limited

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