Overtime Working and Contract Efficiency
AbstractWe present a wage-hours contract designed to minimize costly job turnover given investments in on the job training combined with firm and worker information asymmetries. It may be optimal for the parties to work 'long hours' remunerated at premium rates for guaranteed overtime hours. Based on British plant and machine operatives, we test three predictions. First, trained workers with longer job tenure are more likely to work overtime. Second, hourly overtime pay exceeds the value of marginal product while the basic hourly wage is less than the value of marginal product. Third, the basic hourly wage is negatively related to the overtime premium.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 7560.
Length: 33 pages
Date of creation: Aug 2013
Date of revision:
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Other versions of this item:
- J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
- J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-09-06 (All new papers)
- NEP-CTA-2013-09-06 (Contract Theory & Applications)
- NEP-HRM-2013-09-06 (Human Capital & Human Resource Management)
- NEP-LAB-2013-09-06 (Labour Economics)
- NEP-LMA-2013-09-06 (Labor Markets - Supply, Demand, & Wages)
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