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The Price of Long Hours

Author

Listed:
  • Thimo De Schouwer
  • Sebastiaan Maes
  • Tom Potoms

Abstract

Earnings premiums for long hours vary across occupations, shaping gender sorting and inequality. The leading explanation emphasizes firm-side production technologies, yet hours and wages are equilibrium outcomes reflecting worker preferences and market structure. We build a directed search-and-matching model that allows us to decompose the premium. Premiums compensate for the disutility of long hours and bargaining power; productivity explains little in Tech, where premiums approach 20%. This disutility is highest among women, who sort away from long-hours jobs; these amenity differences account for 22% of the gender earnings gap. In counterfactuals, general-equilibrium responses through market tightness substantially change policy impacts.

Suggested Citation

  • Thimo De Schouwer & Sebastiaan Maes & Tom Potoms, 2026. "The Price of Long Hours," CESifo Working Paper Series 12779, CESifo.
    • Handle: RePEc:ces:ceswps:_12779
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    File URL: https://www.ifo.de/DocDL/cesifo1_wp12779.pdf
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    Keywords

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    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions

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