Overtime Working and Contract Efficiency

Robert Hart and Yue Ma

No 2013-121, SIRE Discussion Papers from Scottish Institute for Research in Economics (SIRE)

Abstract: We present a wage-hours contract designed to minimize costly turnover given investments in specific training combined with firm and worker information asymmetries. It may be optimal for the parties to work ‘long hours’ remunerated at premium rates for guaranteed overtime hours. Based on British plant and machine operatives, we test three predictions. First, trained workers with longer tenure are more likely to work overtime. Second, hourly overtime pay exceeds the value of marginal product while the basic hourly wage is less than the value of marginal product. Third, the basic hourly wage is negatively related to the overtime premium.

Keywords: Paid overtime; wage-hours contract; plant and machine operatives (search for similar items in EconPapers)
Date: 2013
New Economics Papers: this item is included in nep-cta, nep-ger and nep-hrm
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Citations: View citations in EconPapers (1)

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Working Paper: Overtime Working and Contract Efficiency (2013)
Working Paper: Overtime Working and Contract Efficiency (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:edn:sirdps:568

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