Hours and Wages

Alexander Bick, Adam Blandin and Richard Rogerson

No 2022-005, Working Papers from Federal Reserve Bank of St. Louis

Abstract: We document two robust features of the cross-sectional distribution of usual weekly hours and hourly wages. First, usual weekly hours are heavily concentrated around 40 hours, while at the same time a substantial share of total hours come from individuals who work more than 50 hours. Second, mean hourly wages are non-monotonic across the usual hours distribution, with a peak at 50 hours. We develop and estimate a model of labor supply to account for these features. The novel feature of our model is that earnings are non-linear in hours, with the extent of nonlinearity varying over the hours distribution. Our estimates imply significant wage penalties for individuals that deviate from 40 hours in either direction, leading to a large mass of individuals that work 40 hours and are not very responsive to shocks. This has important implications for the role of labor supply as a mechanism for self-insurance in a standard heterogeneous agent-incomplete markets model and for empirical strategies designed to estimate labor supply parameters.

Keywords: weekly hours; hourly wages (search for similar items in EconPapers)
JEL-codes: D31 E24 H31 J22 J31 (search for similar items in EconPapers)
Pages: 51 pages
Date: 2021-12
New Economics Papers: this item is included in nep-hrm and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://s3.amazonaws.com/real.stlouisfed.org/wp/2022/2022-005.pdf Full text (application/pdf)

Related works:
Journal Article: Hours and Wages (2022)
Working Paper: Hours and Wages (2022)
Working Paper: Hours and Wages (2021)
Working Paper: Hours and Wages (2020)
Working Paper: Hours and Wages (2019)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fip:fedlwp:93848

Ordering information: This working paper can be ordered from

DOI: 10.20955/wp.2022.005

Access Statistics for this paper

More papers in Working Papers from Federal Reserve Bank of St. Louis Contact information at EDIRC.
Bibliographic data for series maintained by Scott St. Louis ().