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The effect of overtime regulations on employment

Author

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  • Ronald L. Oaxaca

    (University of Arizona, USA, CEPS/INSTEAD, Luxembourg, PRESAGE, France, and IZA, Germany)

Abstract

Regulation of standard workweek hours and overtime hours and pay can protect workers who might otherwise be required to work more than they would like to at the going rate. By discouraging the use of overtime, such regulation can increase the standard hourly wage of some workers and encourage work sharing that increases employment, with particular advantages for female workers. However, regulation of overtime raises employment costs, setting in motion economic forces that can limit, neutralize, or even reduce employment. And increasing the coverage of overtime pay regulations has little effect on the share of workers who work overtime or on weekly overtime hours per worker.

Suggested Citation

  • Ronald L. Oaxaca, 2014. "The effect of overtime regulations on employment," IZA World of Labor, Institute of Labor Economics (IZA), pages 1-89, October.
  • Handle: RePEc:iza:izawol:journl:y:2014:n:89
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    References listed on IDEAS

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    Cited by:

    1. 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).

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    More about this item

    Keywords

    overtime; wages; labor demand; employment;
    All these keywords.

    JEL classification:

    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy
    • J88 - Labor and Demographic Economics - - Labor Standards - - - Public Policy

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