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The Effects of Overtime Pay Regulation on Worker Compensation

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Author Info
Trejo, Stephen J

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Abstract

Proponents claim that a statutory overtime premium, by raising the relative cost of overtime, may encourage firms to substitute employment for overtime hours. The author argues that there will be no real effects if firms reduce straight-time wages so as to offer the same package of weekly compensation and hours of work that was acceptable initially. Empirical analysis suggests that wage differentials do arise to mitigate the purely demand-driven effects predicted by previous models, but these differentials are not large enough to neutralize overtime pay regulation completely. Copyright 1991 by American Economic Association.

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Publisher Info
Article provided by American Economic Association in its journal American Economic Review.

Volume (Year): 81 (1991)
Issue (Month): 4 (September)
Pages: 719-40
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Handle: RePEc:aea:aecrev:v:81:y:1991:i:4:p:719-40

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  1. Camille Logeay & Sven Schreiber, 2006. "Testing the effectiveness of the French work-sharing reform: a forecasting approach," Applied Economics, Taylor and Francis Journals, vol. 38(17), pages 2053-2068, September. [Downloadable!] (restricted)
  2. Shin-Yi Chou & Michael Grossman & Henry Saffer, 2002. "An Economic Analysis of Adult Obesity: Results from the Behavioral Risk Factor Surveillance System," NBER Working Papers 9247, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  3. Hart, Robert A. & Ma, Yue, 2000. "Why Do Firms Pay an Overtime Premium?," IZA Discussion Papers 163, Institute for the Study of Labor (IZA). [Downloadable!]
  4. Mary Gregory & Adriaan S. Kalwij, 2000. "Overtime Hours in Great Britain Over the Period 1975-1999: A Panel Data Analysis," Economics Series Working Papers 027, University of Oxford, Department of Economics. [Downloadable!]
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  5. David Weil, 2003. "Individual Rights and Collective Agents: The Role of Old and New Workplace Institution in the Regulation of Labor Markets," NBER Working Papers 9565, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  6. David Weil, 2004. "Individual Rights and Collective Agents. The Role of Old and New Workplace Institutions in the Regulation of Labor Markets," NBER Chapters, in: Emerging Labor Market Institutions for the Twenty-First Century, pages 13-44 National Bureau of Economic Research, Inc. [Downloadable!]
  7. Valerie A. Ramey & Matthew D. Shapiro, 1999. "Costly Capital Reallocation and the Effects of Government Spending," NBER Working Papers 6283, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  8. Pannenberg, Markus, 2002. "Long-Term Effects of Unpaid Overtime: Evidence for West Germany," IZA Discussion Papers 614, Institute for the Study of Labor (IZA). [Downloadable!]
  9. David M. Cutler & Brigitte C. Madrian, 1996. "Labor Market Responses to Rising Health Insurance Costs: Evidence on Hours Worked," NBER Working Papers 5525, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  10. Crépon, Bruno & Kramarz, Francis, 2002. "Employed 40 Hours or Not-Employed 39: Lessons from the 1982 Mandatory Reduction of the Workweek," IZA Discussion Papers 416, Institute for the Study of Labor (IZA). [Downloadable!]
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  11. S. Erbaş & Chera Sayers, 2001. "Can a Shorter Workweek Induce Higher Employment? Mandatory Reductions in the Workweek and Employment Subsidies," International Tax and Public Finance, Springer, vol. 8(4), pages 485-509, August. [Downloadable!] (restricted)
  12. Daniel S. Hamermesh, 2000. "12 Million Salaried Workers Are Missing," NBER Working Papers 8016, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  13. Trejo, Stephen, 2001. "Does the Statutory Overtime Premium Discourage Long Workweeks?," IZA Discussion Papers 373, Institute for the Study of Labor (IZA). [Downloadable!]
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  14. TAKAHASHI Katsuhide & URATA Shujiro, 2009. "On the Use of FTAs by Japanese Firms: Further evidence," Discussion papers 09028, Research Institute of Economy, Trade and Industry (RIETI). [Downloadable!]
  15. Jennifer Hunt, 1996. "The Response of Wages and Actual Hours Worked to the Reductions of Standard Hours," NBER Working Papers 5716, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  16. Markus Pannenberg, 2002. "Long-Term Effects of Unpaid Overtime," Discussion Papers of DIW Berlin 293, DIW Berlin, German Institute for Economic Research. [Downloadable!]
  17. Giannelli, Gianna C. & Braschi, Cristina, 2002. "Reducing Hours of Work: Does Overtime Act as a Brake Upon Employment Growth? An Analysis by Gender for the Case of Italy," IZA Discussion Papers 557, Institute for the Study of Labor (IZA). [Downloadable!]
  18. Elizabeth Becker & Cotton M. Lindsay, 2005. "The limits of the wage impact of discrimination," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 26(8), pages 513-525. [Downloadable!]
  19. Casey B. Mulligan, 1997. "Pecuniary Incentives to Work in the U.S. during World War II," NBER Working Papers 6326, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  20. Hart, Robert A. & Ma, Yue, 2008. "Wage-Hours Contracts, Overtime Working and Premium Pay," IZA Discussion Papers 3797, Institute for the Study of Labor (IZA). [Downloadable!]
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  21. Ana Rute Cardoso & Daniel S. Hamermesh & José Varejão, 2008. "The Timing of Labor Demand," UFAE and IAE Working Papers 759.08, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC). [Downloadable!]
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  22. Marcello Estevao, 1996. "Measurement error and time aggregation: a closer look at estimates of output-labor elasticities," Finance and Economics Discussion Series 96-2, Board of Governors of the Federal Reserve System (U.S.). [Downloadable!]
  23. Jay Bhattacharya & Thomas DeLeire & Thomas MaCurdy, 2000. "The California Overtime Experiment: Labor Demand and the Impact of Overtime Regulation on Hours of Work," Working Papers 0024, Harris School of Public Policy Studies, University of Chicago. [Downloadable!]
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