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Work-Life Balance, Management Practices and Productivity

Nick  Bloom,  Tobias  Kretschmer,  John  Van Reenen,  January 2006
Paper No' CEPSP16: | Full paper (pdf)
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Keywords: Work-Life Balance; Management Practices, Productivity, family-friendly workplaces, competition

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This Paper is published under the following series: CEP Special Reports
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Abstract:

Do “Anglo-Saxon” management practices generate higher productivity only at the expense of lousy work-life balance (WLB) for workers? Many critics of “neo-libéralisme sauvage” have argued that increased competition from globalisation is damaging employees’ quality of life. Others have argued the opposite that improving work-life balance is actually a competitive tool that companies can use to raise productivity. We try to shed some empirical light on these issues using an innovative survey tool to collect new data on management and work-life balance practices from 732 medium sized manufacturing firms in the US, France, Germany and the UK. First, we show that our measure of work-life balance is a useful summary of a range of policies in the firm – family-friendly policies, flexible working, shorter hours, more holidays, subsidised childcare, etc. We show that this worklife balance measure is significantly associated with better management. Firms in environments that are more competitive and/or who are more productive, however, do not have significantly worse work-life balance for their workers. These findings are inconsistent with the view that competition, globalisation and “Anglo-Saxon” management practices are intrinsically bad for the work-life balance of workers. On the other hand, neither are these findings supportive of the optimistic “winwin” view that work-life balance improves productivity in its own right. Rather we find support for a “hybrid” theory that work-life balance is a choice for managers that is compatible with low or high productivity.