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Does the Statutory Overtime Premium Discourage Long Workweeks?

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  • Trejo, Stephen J.

Abstract

Using a pooled data set consisting of 20 annual observations on each of eleven major industry groups, I estimate the effects of overtime pay regulation on weekly work schedules. After controlling for workweek trends within industries, the sharp expansions in overtime pay coverage resulting from legislative amendments and Supreme Court decisions produced no discernible impact on overtime hours. This finding is consistent with a model of labor market equilibrium in which straight-time hourly wages adjust to neutralize the statutory overtime premium.

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Bibliographic Info

Paper provided by Department of Economics, UC Santa Barbara in its series University of California at Santa Barbara, Economics Working Paper Series with number qt4c36k4fq.

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Date of creation: 01 Feb 1997
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Handle: RePEc:cdl:ucsbec:qt4c36k4fq

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Keywords: Statutory; Overtime; Premium; Long Workweeks;

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References

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  1. Daniel S. Hamermesh & Stephen J. Trejo, 2000. "The Demand for Hours of Labor: Direct Evidence from California," The Review of Economics and Statistics, MIT Press, vol. 82(1), pages 38-47, February.
  2. Parks, Richard W., 1980. "On the estimation of multinomial logit models from relative frequency data," Journal of Econometrics, Elsevier, vol. 13(3), pages 293-303, August.
  3. Trejo, Stephen J, 1991. "The Effects of Overtime Pay Regulation on Worker Compensation," American Economic Review, American Economic Association, vol. 81(4), pages 719-40, September.
  4. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
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Cited by:
  1. Christine Jolls, 2007. "Employment Law and the Labor Market," NBER Working Papers 13230, National Bureau of Economic Research, Inc.
  2. Cahuc, Pierre & Carcillo, Stéphane, 2011. "The Detaxation of Overtime Hours: Lessons from the French Experiment," IZA Discussion Papers 5439, Institute for the Study of Labor (IZA).
  3. 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.
  4. Andrew Figura, 2004. "Workweek flexibility and hours variation," Finance and Economics Discussion Series 2004-59, Board of Governors of the Federal Reserve System (U.S.).
  5. Regt,Erik R.,de, 2005. "Overtime and Short-time with Fluctuating Absenteeism and Demand," Research Memorandum 026, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).

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