Do Wages Compensate for Anticipated Working Time Restrictions? Evidence from Seasonal Employment in Austria

55 Pages Posted: 17 Aug 2006

See all articles by Emilia Del Bono

Emilia Del Bono

Institute for Social and Economic Research; IZA Institute of Labor Economics

Andrea Weber

Vienna University of Economics and Business; Austrian Institute of Economic Research (WIFO); Institute for the Study of Labor (IZA); CESifo (Center for Economic Studies and Ifo Institute)

Date Written: August 2006

Abstract

In this paper we investigate the existence of compensating wage differentials across seasonal and non seasonal jobs, which arise due to anticipated working time restrictions. We build on a theoretical model by Abowd and Ashenfelter (1981), which links the compensating wage differential to variation in individual unemployment through the effect of the unemployment insurance and the compensated labor supply elasticity. Since the Austrian labor market is characterized by an unusually high share of seasonal employment, our data provides the ideal setting in which to empirically test this model. We use the very rich information contained in the Austrian administrative records to derive a flexible definition of seasonal employment based on observed regularities in employment patterns. We find that employers pay on average a positive wage differential of about 11% for seasonal jobs and that the unemployment insurance system contributes a similar amount.

Keywords: seasonal employment, wage differentials, labor supply elasticity, fixed effects

JEL Classification: J22, J3, C23

Suggested Citation

Del Bono, Emilia and Weber, Andrea Michaela, Do Wages Compensate for Anticipated Working Time Restrictions? Evidence from Seasonal Employment in Austria (August 2006). IZA Discussion Paper No. 2242. Available at SSRN: https://ssrn.com/abstract=924575

Emilia Del Bono

Institute for Social and Economic Research ( email )

Wivenhoe Park
Colchester CO4 3SQ
United Kingdom

HOME PAGE: http://www.iser.essex.ac.uk/staff/staff-details.php?personID=678

IZA Institute of Labor Economics

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

Andrea Michaela Weber (Contact Author)

Vienna University of Economics and Business ( email )

Welthandelsplatz 1
Vienna, 1020
Austria

Austrian Institute of Economic Research (WIFO) ( email )

P.O. Box 91
Wien, A-1103
Austria

Institute for the Study of Labor (IZA)

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

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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