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Free to choose? Differences in the hours determination of constrained and unconstrained workers

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  • Mark L. Bryan

Abstract

In surveys, large minorities of individuals typically report that they would like to change their weekly working hours at their current hourly wage. If this evidence reflects genuine constraints on choice of hours, the determinants of hours should differ between constrained and unconstrained groups. Controlling for selection by an extension of the Heckman two-step method to ordered selection and panel data, and using a sample of manual men, I find that unconstrained workers' hours are determined differently from those of constrained workers. I present evidence that local labour market conditions affect the hours of constrained but not of unconstrained workers. I also correct for the potential bias resulting from the use of observed hours to derive the hourly wage, by instrumenting it with its lagged value. The combination of ignoring hours constraints and assuming the derived hourly wage is exogenous imparts a downward bias to wage elasticity estimates. Copyright 2007 , Oxford University Press.

Suggested Citation

  • Mark L. Bryan, 2007. "Free to choose? Differences in the hours determination of constrained and unconstrained workers," Oxford Economic Papers, Oxford University Press, vol. 59(2), pages 226-252, April.
  • Handle: RePEc:oup:oxecpp:v:59:y:2007:i:2:p:226-252
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    References listed on IDEAS

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    Cited by:

    1. Carmen Camacho & Fabio Mariani & Luca Pensieroso, 2017. "Illegal immigration and the shadow economy," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 24(6), pages 1050-1080, December.
    2. Andrew Benito & Jumana Saleheen, 2013. "Labour Supply as a Buffer: Evidence from UK Households," Economica, London School of Economics and Political Science, vol. 80(320), pages 698-720, October.
    3. Muriel Dejemeppe & Catherine Smith & Bruno der Linden, 2015. "Did the Intergenerational Solidarity Pact increase the employment rate of older workers in Belgium? A macro-econometric evaluation," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-23, December.
    4. KURODA Sachiko & YAMAMOTO Isamu, 2011. "Firm's demand for work hours: Evidence from multi-country and matched firm-worker data," Discussion papers 11024, Research Institute of Economy, Trade and Industry (RIETI).
    5. Heineck, Guido & Schwarze, Johannes, 2004. "Fly Me to the Moon: The Determinants of Secondary Jobholding in Germany and the UK," IZA Discussion Papers 1358, Institute for the Study of Labor (IZA).
    6. repec:kap:reveho:v:15:y:2017:i:4:d:10.1007_s11150-017-9389-6 is not listed on IDEAS
    7. Paul, Annemarie, 2015. "After work shopping? Employment effects of a deregulation of shop opening hours in the German retail sector," European Economic Review, Elsevier, vol. 80(C), pages 329-353.
    8. repec:bla:scandj:v:119:y:2017:i:4:p:910-938 is not listed on IDEAS
    9. Anne C. Gielen, 2009. "Working hours flexibility and older workers' labor supply," Oxford Economic Papers, Oxford University Press, vol. 61(2), pages 240-274, April.
    10. Richard Blundell & Mike Brewer & Marco Francesconi, 2008. "Job Changes and Hours Changes: Understanding the Path of Labor Supply Adjustment," Journal of Labor Economics, University of Chicago Press, vol. 26(3), pages 421-453, July.
    11. Robin Boadway & Zhen Song & Jean-François Tremblay, 2017. "Optimal Income Taxation and Job Choice," Scandinavian Journal of Economics, Wiley Blackwell, vol. 119(4), pages 910-938, October.
    12. Daniel Borowczyk-Martins & Etienne Lalé, 2017. "Employment Adjustment and Part-time Work: Lessons from the United States and the United Kingdom," CIRANO Working Papers 2017s-27, CIRANO.
    13. Catherine SMITH, 2014. "Did the Intergenerational Solidarity Pact increase the employment rate of the elderly in Belgium? A macro-econometric evaluation," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2014009, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).

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