Title:
THE IMPACT OF FLEXIBLE WORKING ARRANGEMENTS ON INCOME: AN INSTRUMENTAL VARIABLE ANALYSIS OF WORK AUTONOMY IN THE UK

Authors:
Dongjing Chen, Jiming Dong and Yueran Wang, China

Abstract:
This research investigates the impact of flexible working arrangements (FWAs) on individual net labor income. Using data from the UK Household Longitudinal Study, we employ fixed effects and instrumental variable models to examine whether having more control over work causes a higher wage level. The study indicates that work autonomy is positively and statistically significantly associated with individual net labor income. As job segmentation and house ownership are used as instrumental variables to address potential endogeneity, we find that FWAs improved productivity and income levels with a higher coefficient than we previously concluded in the baseline model. The findings also emphasize the complex interaction between FWAs and work-life balance, where variables such as housework time and the number of children can negatively affect earnings. This study contributes to the understanding of FWAs' function in income determination and provides insights for designing jobs to maximize both worker performance and financial outcomes.