Do Labor Markets Provide Enough Short Hour Jobs? An Analysis of Work Hours and Work Incentives

27 Pages Posted: 16 Aug 2010

See all articles by James B. Rebitzer

James B. Rebitzer

Boston University School of Management; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics; Bard College - The Levy Economics Institute

Lowell J. Taylor

Carnegie Mellon University - H. John Heinz III School of Public Policy and Management

Date Written: October 1991

Abstract

This paper examines the role that work incentives play in the determination of work hours. Following previous research by Lang (1989), we use a conventional efficiency wage model to analyze how firms respond to worker preferences regarding wage-hours packages. We find that when workers are homogeneous, the role of worker preferences in determining work hours is similar to the simple neoclassical model of labor supply. For instance, if worker preferences shift in favor of shorter hours, firms will respond by offering jobs entailing shorter hours. When workers have heterogeneous preferences, however, employers will want to use a worker's hours preferences as a signal for the responsiveness of the worker to the work incentives used by the firm, and workers in turn may not reveal their hours preferences. Our key finding in this instance is that the labor market equilibrium may be characterized by a sub-optimal number of short-hour jobs. This shortage of short-hour jobs is likely to be found in high wage labor markets.

Suggested Citation

Rebitzer, James B. and Taylor, Lowell J., Do Labor Markets Provide Enough Short Hour Jobs? An Analysis of Work Hours and Work Incentives (October 1991). NBER Working Paper No. w3883. Available at SSRN: https://ssrn.com/abstract=1658296

James B. Rebitzer (Contact Author)

Boston University School of Management ( email )

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617 353 4605 (Phone)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
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IZA Institute of Labor Economics

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Bard College - The Levy Economics Institute

Blithewood
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United States

Lowell J. Taylor

Carnegie Mellon University - H. John Heinz III School of Public Policy and Management ( email )

Pittsburgh, PA 15213-3890
United States
412-268-3278 (Phone)
412-268-7036 (Fax)

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