Do the Flexible Employment Arrangements Increase Job Satisfaction and Employee Loyalty? Evidence from Bayesian Networks and Instrumental Variables

Abstract

This study explores the relationship between job satisfaction, employee loyalty and two types of flexible employment arrangements; teleworking and flexible timing. The analysis relies on data derived from the workplace employment relations survey (WERS) in 2004 and 2011. We apply the propensity score matching approach and least squares regressions. Furthermore, we employ the Bayesian networks (BN) and directed acyclic graphs (DAGs) to confirm the causality between employment types explored and the outcomes of interest. Additionally, we propose an instrumental variables (IV) approach based on the BN framework. The results support that a positive causal effect from these employment arrangements on job satisfaction and employee loyalty is present.