The Economics of Overtime Working

Cover......Page 1
Half-title......Page 3
Title......Page 5
Copyright......Page 6
Dedication......Page 7
Contents......Page 9
Figures......Page 10
Tables......Page 12
Preface......Page 13
1 Overview......Page 15
1.1 The two core models......Page 17
1.2 Key developments and issues......Page 19
2 Facts and figures......Page 25
2.1 Overtime hours per employee......Page 26
2.2 Proportion of overtime to total workers......Page 31
2.3 Overtime hours and standard hours......Page 39
2.4 Legislative limits......Page 43
2.5 The overtime premium......Page 44
2.6 Wage earnings decomposition......Page 49
2.7 Paid and unpaid overtime......Page 51
2.8 Summary......Page 56
3 The overtime decision......Page 57
3.1 Labour supply......Page 59
Labour services......Page 64
Cost minimisation......Page 65
Profit maximisation......Page 67
A rising overtime schedule......Page 69
Explicit differentiation between standard and overtime hours in production......Page 71
Additional production inputs......Page 73
Make-to-order production......Page 74
3.3 Non-overtime and overtime workers......Page 75
3.4 Overtime and effort......Page 79
3.6 Bargaining......Page 81
Indivisible hours and earnings-hours preferences......Page 84
Implications for overtime regulation......Page 86
More on overtime regulation......Page 87
3.8 Unpaid overtime......Page 88
3.9 Summary......Page 91
Appendix 3.1 Cost minimisation and an exogenous increase in the overtime premium......Page 92
Appendix 3.2 Profit maximisation and an exogenous increase in the overtime premium......Page 94
4 The overtime premium......Page 95
Work sharing......Page 97
Approximately efficient contracts......Page 98
4.2 Custom and practice......Page 100
4.3 Heterogeneous worker preferences......Page 104
4.4 Hours preferences, productivity and industrial relations......Page 108
4.5 The premium, marginal product and work incentive......Page 110
4.6 Summary......Page 112
5.1 Individual-based studies of overtime......Page 114
5.2 Establishment-based studies of overtime......Page 118
5.3 Returns to workers and hours......Page 120
5.4 Dynamic adjustment and job-match effects......Page 123
5.5 Actual and desired hours......Page 125
5.6 Returns to unpaid overtime......Page 127
5.7 Summary......Page 129
6 Overtime pay and empirical studies......Page 131
6.1 Wage earnings or wage rates?......Page 132
6.2 Longitudinal micro studies......Page 134
6.3 Regional wage curves......Page 136
6.4 Marginal cost and price over the cycle......Page 140
6.5 The frequency domain and earnings decomposition......Page 142
6.6 Paid-for and effective hourly wages......Page 143
6.7 Summary......Page 145
Appendix 6.1 Hours curves......Page 146
7.1 Work sharing and mandatory overtime rules......Page 148
7.2 Taxes, subsidies, profits and job creation......Page 155
Employment taxes and subsidies......Page 156
7.3 Absenteeism......Page 159
8 Is overtime working here to stay?......Page 165
References......Page 170
Index of names......Page 178
Index of subjects......Page 180