Does the Statutory Overtime Premium Discourage Long Workweeks?

Posted: 5 May 2003

See all articles by Stephen J. Trejo

Stephen J. Trejo

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

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Abstract

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

Suggested Citation

Trejo, Stephen J., Does the Statutory Overtime Premium Discourage Long Workweeks?. Available at SSRN: https://ssrn.com/abstract=394442

Stephen J. Trejo (Contact Author)

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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