How does part-time work affect firm performance and innovation activity?

This paper analyzes how part-time work affects financial and innovative firm performance. Moreover, it provides a detailed examination of part-time work by defining three different forms of part-time work (large, medium and small part-time work) depending on weekly working hours. Considering human capital theory, I expect part-time workers to have lower work experience and to accumulate less human capital. Thus I hypothesize that part-time work affects both, financial and innovative firm performance, negatively. For the empirical investigation I use a large German firm-level data set. The analysis shows that increasing part-time work has a significant negative impact on financial firm performance. Specifically, there are differences with regard to the considered categories of part-time work. Part-time workers having the fewest working hours per week have the strongest negative impact on financial firm performance. However the negative effect of part-time work does not remain for innovative firm performance. The results show no significant difference between part-time and full-time workers in their impact on innovative firm performance.