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A panel data analysis of the effects of wages, standard hours and unionization on paid overtime work in Britain

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  • Adriaan S. Kalwij
  • Mary Gregory

Abstract

Summary. This study examines the effects of the basic wage rate, standard working hours and unionization on paid overtime work in Britain by using individual level data from the New Earnings Survey over the period 1975–2001. For this purpose we estimate a panel data model. We show that to obtain consistent estimates it is important to allow for both the censoring of paid overtime hours at 0 and for correlations between the explanatory variables and unobserved individual‐specific effects. The main empirical results are that a reduction in standard hours increases both the incidence of overtime and overtime hours, whereas an increase in the wage rate decreases the incidence of overtime but brings a small increase in overtime hours for those working overtime. For men the effects are stronger than for women. Union coverage is of minor empirical importance. The occupation and industry structure of employment has shifted from high to lower overtime jobs. Taken together, these economic variables can explain almost half of the changing incidence of overtime for men, and most of the change in overtime hours worked by women, but are less successful in explaining the changes in overtime hours worked by men or the incidence of overtime for women.

Suggested Citation

  • Adriaan S. Kalwij & Mary Gregory, 2005. "A panel data analysis of the effects of wages, standard hours and unionization on paid overtime work in Britain," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 168(1), pages 207-231, January.
    • Handle: RePEc:bla:jorssa:v:168:y:2005:i:1:p:207-231
    DOI: 10.1111/j.1467-985X.2004.00344.x
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    References listed on IDEAS

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    1. Jennifer Hunt, 1999. "Has Work-Sharing Worked in Germany?," The Quarterly Journal of Economics, Oxford University Press, vol. 114(1), pages 117-148.
    2. Wooldridge, Jeffrey M., 1995. "Selection corrections for panel data models under conditional mean independence assumptions," Journal of Econometrics, Elsevier, vol. 68(1), pages 115-132, July.
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    Cited by:

    1. Veliziotis, Michail, 2010. "Trade unions and unpaid overtime in Britain," ISER Working Paper Series 2010-43, Institute for Social and Economic Research.
    2. Jason Murasko, 2008. "Married Women’s Labor Supply and Spousal Health Insurance Coverage in the United States: Results from Panel Data," Journal of Family and Economic Issues, Springer, vol. 29(3), pages 391-406, September.
    3. Adriaan Kalwij, 2015. "Two tests for strict exogeneity in a correlated random effects panel data Tobit model," Statistica Neerlandica, Netherlands Society for Statistics and Operations Research, vol. 69(2), pages 115-125, May.
    4. Sabrina Di Addario & Eleonora Patacchini, 2006. "Is there an urban wage premium in Italy?," Temi di discussione (Economic working papers) 570, Bank of Italy, Economic Research and International Relations Area.
    5. Kalwij, A.S., 2004. "A Two-Step First Difference Estimator for a Panel Data Tobit Model under Conditional Mean Independence Assumptions," Discussion Paper 2004-67, Tilburg University, Center for Economic Research.
    6. Tekin Akgeyik, 2021. "Fazla Çalışmanın İşyükü ve İşgücü Belirleyicileri(Bir Şirketin Veri Seti Üzerine Ampirik Bir Araştırma)," Journal of Social Policy Conferences, Istanbul University, Faculty of Economics, vol. 0(80), pages 37-65, June.
    7. Rafael Gralla & Kornelius Kraft & Stanislav Volgushev, 2017. "The effects of works councils on overtime hours," Scottish Journal of Political Economy, Scottish Economic Society, vol. 64(2), pages 143-168, May.
    8. Sabrina Di Addario & Eleonora Patacchini & University of Rome La Sapienza, 2005. "Wages and the City. The Italian case," Economics Series Working Papers 243, University of Oxford, Department of Economics.

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