Work-Life Balance and the Economics of Workplace Flexibility
Executive Office of the President Council of Economic Affairs
[Excerpt] American society has changed dramatically over the past half century. Women have entered the labor force in growing numbers and families have increasingly relied on more than one earner to make ends meet. And yet, children still need to be taken to the doctor and elderly parents still need care. Moreover, more adults older than 25 are attending school. Because these changes have caused many workers to face conflicts between their work and their personal lives, they also inspire a need and desire for more flexibility in the workplace. Flexible workplace arrangements can be in terms of when one works, where one works, or how much one works (including time off after childbirth or other life events). They include a variety of arrangements such as job sharing, phased retirement of older workers, and telecommuting, that allow workers to continue making productive contributions to the workforce while also attending to family and other responsibilities. This report presents an economic perspective on flexible workplace policies and practices. The first section reports some of the changes in the U.S. workforce that have increased the need for flexibility in the workplace. • Women comprise nearly one-half of the labor force; in nearly one-half of households all adults are working. • In 2008, approximately 43.5 million Americans served as unpaid caregivers to a family member over the age of 50. Nearly one-fifth of employed people were caregivers who provided care to a person over age 50. • The increasing demand for analytical and interactive skills—those largely obtained through post-secondary education—means it is all the more important and common for individuals to pursue additional education while also working. The second section examines the current state of flexible work arrangements and reports that many employers have adapted to the changing realities of American workers. • Overall, over one-half of employers report allowing at least some workers to periodically change their starting and quitting times. However, less than one-third of full-time workers report having flexible work hours, and only 39 percent of part-time workers do. This discrepancy between the employer and employee reports may be due to differences in data collection or because more employers would be willing to accommodate the needs of individual workers but these workers are not aware of it. • Less-skilled workers have less workplace flexibility in terms of the scheduling of when they work than do more highly-skilled workers. • Flexibility in where to work is less common: only about 15 percent of workers report working from home at least once per week. • Finally, most employers offer at least some workers the ability to return to work gradually after a major life event such as the birth or adoption of a child, although job sharing appears less widespread. The report concludes with a discussion of the economic benefits of workplace flexibility arrangements. • Almost one-third of firms cite costs or limited funds as obstacles to implementing workplace flexibility arrangements. However, the benefits of adopting such management practices can outweigh the costs by reducing absenteeism, lowering turnover, improving the health of workers, and increasing productivity. • The costs and benefits of adopting flexible arrangements differ across industries and employers of different sizes. • Because many employers may not have accurate information about the costs and benefits of workplace flexibility practices and because some of the benefits may extend beyond the individual employer and its workers, wider adoption of such policies and practices may well have benefits to more firms and workers, and for the U.S. economy as a whole. • A factor hindering a deeper understanding of the benefits and costs of flexibility is a lack of data on the prevalence of workplace flexibility arrangements, and more research is needed on the mechanisms through which flexibility influences workers’ job satisfaction and firm profits to help policy makers and managers alike.
workplace; flexiblility; labor market; public policy; gender