The Demand for Hours of Labor: Direct Evidence from California

19 Pages Posted: 27 Jun 2000

See all articles by Daniel S. Hamermesh

Daniel S. Hamermesh

University of Texas at Austin - Department of Economics; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

Stephen J. Trejo

University of Texas at Austin - Department of Economics; IZA Institute of Labor Economics

Multiple version iconThere are 2 versions of this paper

Date Written: March 1997

Abstract

For many years California has required that most women receive time-and-a-half for hours of work beyond 8 in a given day. In 1980 this daily overtime penalty was extended to men. This change provides a unique opportunity to estimate the impact of an exogenous increase in the relative price of a marginal hour of labor on the demand for hours of work. Analyzing Current Population Survey data from 1973 and 1985, we find that the overtime penalty substantially reduced the amount of daily overtime worked by California men compared to men in other states and to women in California. Our estimates imply that the price elasticity of demand for overtime hours is at least -0.70.

Suggested Citation

Hamermesh, Daniel S. and Trejo, Stephen J., The Demand for Hours of Labor: Direct Evidence from California (March 1997). NBER Working Paper No. w5973, Available at SSRN: https://ssrn.com/abstract=225752

Daniel S. Hamermesh (Contact Author)

University of Texas at Austin - Department of Economics ( email )

Austin, TX 78712
United States
512-475-8526 (Phone)
512-471-3510 (Fax)

National Bureau of Economic Research (NBER)

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

P.O. Box 7240
Bonn, D-53072
Germany

Stephen J. Trejo

University of Texas at Austin - Department of Economics ( email )

Austin, TX 78712
United States
512-475-8512 (Phone)
512-471-3510 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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