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Part-Time Employment And The Productivity Of Firms

Part-Time Employment And The Productivity Of Firms

​Part-Time Employment And The Productivity Of Firms

Part-time employment has been on the rise in Singapore, with a significant proportion of the part-time workers employed in the Retail Trade, Accommodation and Food Services sectors. However, the impact of having a part-time workforce on a firm’s productivity is uncertain. On the one hand, part-time workers could be less likely to go for training and may also lead to coordination problems within the firm, thus dampening productivity. On the other hand, the hiring of part-time workers may allow the firm to optimise processes and resources to meet variations in demand, thereby raising productivity. The objective of this study is thus to determine whether there is a positive or negative relationship between part-time employment and firm-level productivity in the Retail Trade, Accommodation and Food Services sectors.

Our results show that there is a positive and statistically significant relationship between firms’ productivity and their part-time employment share in the three sectors. Specifically, when we consider the firms in the three sectors as a group, we find that a one percentage-point increase in a firm’s parttime employment share is associated with a 0.17% increase in its value-added per full-time equivalent worker (our proxy for productivity) on average. However, when the firms in each sector are examined separately, a positive and statistically significant relationship between firms’ productivity and part-time employment share was found only for the Retail Trade sector, suggesting that the hiring of part-time workers has been beneficial for the firms in this sector. On the other hand, statistically insignificant results were found for the Accommodation and Food Services sectors, suggesting that the hiring of parttime workers has not had an impact on the productivity of the firms in these two sectors.

On balance, this study finds that the hiring of part-time workers has not been detrimental to the productivity of the firms in the three sectors. In fact, it may have a positive impact for firms in the Retail Trade sector.

The views expressed in this paper are solely those of the authors and do not necessarily reflect those of the Ministry of Trade and Industry or the Government of Singapore.

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