Overtime Working and Contract Efficiency

Robert Hart and Yue Ma

No 7560, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We present a wage-hours contract designed to minimize costly job turnover given investments in on the job 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 job 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)
JEL-codes: J33 J41 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2013-08
New Economics Papers: this item is included in nep-cta, nep-hrm, nep-lab and nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Overtime Working and Contract Efficiency (2013)
Working Paper: Overtime Working and Contract Efficiency (2013)
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