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Compensating wage differentials and shift work preferences

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  • Lanfranchi, Joseph
  • Ohlsson, Henry
  • Skalli, Ali

Abstract

Workers with difficult working conditions can be expected to be com-pensated by higher wages. They may, for example, choose shift work because of compensating wages but it is also possible that they prefer shift work. The previous empirical evidence is mixed. We study if there are compensating wages for shift work by estimating a switching regression model with endogenous switching using French matched employer–employee data for male full time blue collar workers. It is crucial to adjust for selectivity and not to pool data for shift and day workers. A main result is that there is a significant shift premium, the wage rate for shift workers is 16 percent higher than for day workers. A second main result is that the shift premium is significant for shift work choice. This premium compensates workers who do not self–select into shift work. A 1 percentage point increase in the premium increases the shift work probability by 0.87 percentage points.

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Bibliographic Info

Article provided by Elsevier in its journal Economics Letters.

Volume (Year): 74 (2002)
Issue (Month): 3 (February)
Pages: 393-398

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Handle: RePEc:eee:ecolet:v:74:y:2002:i:3:p:393-398

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Web page: http://www.elsevier.com/locate/ecolet

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  1. James J. Heckman, 1977. "Dummy Endogenous Variables in a Simultaneous Equation System," NBER Working Papers 0177, National Bureau of Economic Research, Inc.
  2. Willis, Robert J & Rosen, Sherwin, 1979. "Education and Self-Selection," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages S7-36, October.
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  4. Oosterbeek, Hessel & van Praag, Mirjam, 1995. " Firm-Size Wage Differentials in the Netherlands," Small Business Economics, Springer, vol. 7(3), pages 173-82, June.
  5. Ali Skalli & Mahmood Araï & Gérard Ballot, 1996. "Différentiels intersectoriels de salaire et caractéristiques des employeurs en France," Économie et Statistique, Programme National Persée, vol. 299(1), pages 37-58.
  6. Edward J. Schumacher & Barry T. Hirsch, 1997. "Compensating differentials and unmeasured ability in the labor market for nurses: Why do hospitals pay more?," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 50(4), pages 557-579, July.
  7. Altonji, Joseph G & Shakotko, Robert A, 1987. "Do Wages Rise with Job Seniority?," Review of Economic Studies, Wiley Blackwell, vol. 54(3), pages 437-59, July.
  8. Kostiuk, Peter F, 1990. "Compensating Differentials for Shift Work," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 1054-75, October.
  9. Michel Gollac & Christian Baudelot, 1993. "Salaires et conditions de travail," Économie et Statistique, Programme National Persée, vol. 265(1), pages 65-84.
  10. Hamermesh, Daniel S, 1999. "The Timing of Work over Time," Economic Journal, Royal Economic Society, vol. 109(452), pages 37-66, January.
  11. Hartog, Joop & Oosterbeek, Hessel, 1993. "Public and private sector wages in the Netherlands," European Economic Review, Elsevier, vol. 37(1), pages 97-114, January.
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