Flexible Jobs Make Parents Happier: Evidence from Australia

Abstract

Recent studies have found that self-reported life satisfaction drops during the transition into parenthood. This decline is often attributed to a work-family conflict. This study investigates whether different forms of flexible employment can alleviate this drop in parental life satisfaction during this period. A fixed-effects analysis in an event study framework using Australian household survey data (HILDA) delivers convincing evidence that working flexibly indeed alleviates the drop in subjective well-being,  suggesting that it relieves the stress related to work-family conflict. Moreover, we find substantial gender heterogeneity in the effects of different types of flexible employment on mothers' and fathers' life satisfaction. Mothers with short part-time jobs (0-20 hours per week) exhibit greater life satisfaction than mothers who work full-time, especially when their children are younger than four. Among fathers, self-scheduling and home-based work yield a significant increase in perceived happiness compared to fixed employment terms. This is especially true for fathers of one- and two-year-olds. These results are consistent with a stereotypical intra-household time allocation of parents in Australia and typical labour market trajectories of each gender around childbirth.