Does the Statutory Overtime Premium Discourage Long Workweeks?
Posted: 5 May 2003
Using a pooled data set consisting of 20 annual observations on each of 11 major industry groups, the author estimates the effects of overtime pay regulation on weekly work schedules. In an analysis that controls for workweek trends within industries, the sharp expansions in overtime pay coverage resulting from legislative amendments and Supreme Court decisions are found to have had no discernible impact on overtime hours. This finding is consistent with a model of labor market equilibrium in which straight-time hourly wages adjust to neutralize the statutory overtime premium.
Keywords: overtime, work hours, compensating differential
JEL Classification: J33, J38, J23
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