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Wages, Hours, and Overtime Premia: Evidence from the British Labor Market

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  • David N. F. Bell
  • Robert A. Hart

Abstract

Unlike the United States, Britain has no national laws regulating overtime hour assignment or compensation. Using individual-level data on male non-managerial workers from the 1998 British New Earnings Survey, the authors investigate relationships among the standard hourly wage rate, hourly earnings (including overtime), the overtime premium, and the length of overtime hours. They find that when overtime is accounted for, average hourly wage earnings are fairly uniform across firms in a given industry, because firms paying below-market-level straight-time wages tend to award above-market-level overtime premiums, and, conversely, firms paying above-market-level straight-time wages provide below-market-level overtime premiums.

Suggested Citation

  • David N. F. Bell & Robert A. Hart, 2003. "Wages, Hours, and Overtime Premia: Evidence from the British Labor Market," ILR Review, Cornell University, ILR School, vol. 56(3), pages 470-480, April.
    • Handle: RePEc:sae:ilrrev:v:56:y:2003:i:3:p:470-480
    DOI: 10.1177/001979390305600306
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    References listed on IDEAS

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    Cited by:

    1. HASEBE Takuya & KONISHI Yoshifumi & SHIN Kong Joo & MANAGI Shunsuke, 2018. "White Collar Exemption: Panacea for long work hours and low earnings?," Discussion papers 18002, Research Institute of Economy, Trade and Industry (RIETI).
    2. Daniel Schaefer & Carl Singleton, 2023. "The Extent of Downward Nominal Wage Rigidity: New Evidence from Payroll Data," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 51, pages 60-76, December.
    3. Ronald L. Oaxaca & Galiya Sagyndykova, 2020. "The effect of overtime regulations on employment," IZA World of Labor, Institute of Labor Economics (IZA), pages 1-89, December.
    4. Takahashi Katsuhide & Urata Shujiro, 2010. "On the Use of FTAs by Japanese Firms: Further Evidence," Business and Politics, De Gruyter, vol. 12(1), pages 1-17, April.
    5. Hart, Robert A. & Ma, Yue, 2013. "Overtime Working and Contract Efficiency," IZA Discussion Papers 7560, Institute of Labor Economics (IZA).
    6. Natsuki Arai & Masashige Hamano & Munechika Katayama & Yuki Murakami & Katsunori Yamada, 2022. "Nightless City: Impacts of Policymakers’ Questions on Overtime Work of Government Officials," Working Papers 2125, Waseda University, Faculty of Political Science and Economics, revised Oct 2023.
    7. KURODA Sachiko & YAMAMOTO Isamu, 2009. "How are Hours Worked and Wages Affected by Labor Regulations?: The white-collar exemption and 'name-only managers' in Japan," Discussion papers 09031, Research Institute of Economy, Trade and Industry (RIETI).
    8. Dante Contreras & Roberto Gillmore & Esteban Puentes, 2017. "Self‐Employment and Queues for Wage Work: Evidence from Chile," Journal of International Development, John Wiley & Sons, Ltd., vol. 29(4), pages 473-499, May.
    9. Kuroda, Sachiko & Yamamoto, Isamu, 2012. "Impact of overtime regulations on wages and work hours," Journal of the Japanese and International Economies, Elsevier, vol. 26(2), pages 249-262.
    10. Anthony Barkume, 2010. "The Structure of Labor Costs with Overtime Work in U.S. Jobs," ILR Review, Cornell University, ILR School, vol. 64(1), pages 128-142, October.
    11. Bell, David N.F. & Hart, Robert A., 2019. "The Decline of Overtime Working in Britain," IZA Discussion Papers 12651, Institute of Labor Economics (IZA).
    12. Eden,Maya, 2016. "The week," Policy Research Working Paper Series 7598, The World Bank.
    13. Rutherford, Alasdair, 2009. "Where is the Warm Glow? Donated Labour and Nonprofit Wage Differentials in the Health and Social Work Industries," Stirling Economics Discussion Papers 2009-20, University of Stirling, Division of Economics.
    14. Daniel Schaefer & Carl Singleton, 2020. "Nominal Wage Adjustments and the Composition of Pay: New Evidence from Payroll Data," Economics Discussion Papers em-dp2020-01, Department of Economics, University of Reading.
    15. Hart, Robert A. & Ma, Yue, 2010. "Wage-hours contracts, overtime working and premium pay," Labour Economics, Elsevier, vol. 17(1), pages 170-179, January.
    16. Martins, Pedro S., 2016. "Can Overtime Premium Flexibility Promote Employment? Firm- and Worker-Level Evidence from a Labour Law Reform," IZA Discussion Papers 10205, Institute of Labor Economics (IZA).
    17. Boudreaux, Don & Palagashvili, Liya, 2016. "An Economic Analysis of Overtime Pay Regulations," Working Papers 06869, George Mason University, Mercatus Center.
    18. Sagyndykova, Galiya & Oaxaca, Ronald L., 2019. "Raising the Overtime Premium and Reducing the Standard Workweek: Short-Run Impacts on U.S. Manufacturing," IZA Discussion Papers 12557, Institute of Labor Economics (IZA).
    19. David N. F. Bell & Robert A. Hart, 2023. "The decline of paid overtime working in Britain," British Journal of Industrial Relations, London School of Economics, vol. 61(2), pages 235-258, June.
    20. Riffat Bhutto, 2015. "Extended Work Overtime: Labors (Employees) Choice or Obligation," South Asian Journal of Management Sciences (SAJMS), Iqra University, Iqra University, vol. 9(2), pages 63-68, Fall.
    21. 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.
    22. Martins, Pedro S., 2017. "Economic effects of overtime premium flexibility: Firm- and worker-level evidence from a law reform," GLO Discussion Paper Series 102, Global Labor Organization (GLO).

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