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Overtime Hours in Great Britain over the Period 1975-1999: A Panel Data Analysis

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  • Kalwij, Adriaan

    () (Utrecht School of Economics)

  • Gregory, Mary

    () (University of Oxford)

Abstract

Around 40% of the male workforce regularly works 8 to 9 hours a week of paid overtime. This paper investigates the determinants of overtime hours in Britain over the period 1975-1999. For this purpose a panel data Tobit model is estimated using the very large panel of employees from the National Earnings Survey Panel Dataset. The empirical results show that changes in the job-mix across the economy, from high to low overtime jobs rather than within-job changes in the use of overtime, account for most of the apparent decline in the extent of overtime working over the 1990s. Within jobs, the GDP cycle has a significant impact on overtime work, while labour market conditions, represented by the unemployment rate, do not. The elasticity of total working hours with respect to wages is found to be close to zero and with respect to contractual hours close to unity. Furthermore the results show that the decline of unionisation has not altered the use of overtime.

Suggested Citation

  • Kalwij, Adriaan & Gregory, Mary, 2000. "Overtime Hours in Great Britain over the Period 1975-1999: A Panel Data Analysis," IZA Discussion Papers 153, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp153
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    References listed on IDEAS

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    1. Kalwij, Adriaan S., 2003. "A maximum likelihood estimator based on first differences for a panel data Tobit model with individual specific effects," Economics Letters, Elsevier, vol. 81(2), pages 165-172, November.
    2. David N F Bell & Robert A Hart, 1995. "Working Time in Great Britain, 1975-1990," Working Papers Series 95/9, University of Stirling, Division of Economics.
    3. Bauer, Thomas & Zimmermann, Klaus F, 1999. "Overtime Work and Overtime Compensation in Germany," Scottish Journal of Political Economy, Scottish Economic Society, vol. 46(4), pages 419-436, September.
    4. Trejo, Stephen J, 1991. "The Effects of Overtime Pay Regulation on Worker Compensation," American Economic Review, American Economic Association, vol. 81(4), pages 719-740, September.
    5. Calmfors, Lars & Hoel, Michael, 1988. " Work Sharing and Overtime," Scandinavian Journal of Economics, Wiley Blackwell, vol. 90(1), pages 45-62.
    6. Millard, Stephen & Scott, Andrew & Sensier, Marianne, 1997. "The Labour Market over the Business Cycle: Can Theory Fit the Facts?," Oxford Review of Economic Policy, Oxford University Press, vol. 13(3), pages 70-92, Autumn.
    7. Bell, D. & RA Hart, 1999. "Overtime Working in an Unregulated Labour Market," Working Papers Series 9904, University of Stirling, Division of Economics.
    8. Mundlak, Yair, 1978. "On the Pooling of Time Series and Cross Section Data," Econometrica, Econometric Society, vol. 46(1), pages 69-85, January.
    9. Trejo, Stephen J, 1993. "Overtime Pay, Overtime Hours, and Labor Unions," Journal of Labor Economics, University of Chicago Press, vol. 11(2), pages 253-278, April.
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    Cited by:

    1. M. J. Andrews & T. Schank & R. Simmons, 2005. "Does Worksharing Work? Some Empirical Evidence From The Iab-Establishment Panel," Scottish Journal of Political Economy, Scottish Economic Society, vol. 52(2), pages 141-176, May.
    2. Simmons, R. & Schank, Thorsten & Andrews, Martyn J., 2004. "Does Worksharing Work? Some Empirical Evidence from the IAB Panel," Discussion Papers 25, Friedrich-Alexander University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
    3. Kapteyn, Arie & Kalwij, Adriaan & Zaidi, Asghar, 2004. "The myth of worksharing," Labour Economics, Elsevier, vol. 11(3), pages 293-313, June.

    More about this item

    Keywords

    contractual hours; panel data Tobit model; Overtime work;

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • C44 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Operations Research; Statistical Decision Theory
    • J00 - Labor and Demographic Economics - - General - - - General

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