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

Emilia Del Bono and Andrea Weber

No 2242, IZA Discussion Papers from Institute of Labor Economics (IZA)

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: labor supply elasticity; wage differentials; seasonal employment; fixed effects panel estimation (search for similar items in EconPapers)
JEL-codes: C23 J22 J3 (search for similar items in EconPapers)
Pages: 55 pages
Date: 2006-08
New Economics Papers: this item is included in nep-lab
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Citations: View citations in EconPapers (9)

Published - published in: Journal of Labor Economics, 2008, 26(1), 181-221

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Related works:
Journal Article: Do Wages Compensate for Anticipated Working Time Restrictions? Evidence from Seasonal Employment in Austria (2008)
Working Paper: Do wages compensate for anticipated working time restrictions? Evidence from seasonal employment in Austria (2006)
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