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Work Hours, Wages, and Vacation Leave

  • Joseph G. Altonji
  • Emiko Usui

Using the Panel Study of Income Dynamics and the Health and Retirement Study, we provide a set of facts about vacation leave and its relationship to hours worked, hours constraints, wage rates, worker characteristics, spouse's vacation leave, labor market experience, job tenure, occupation, industry, and labor market conditions. We show that on average vacation time taken rises 1 to 1 with paid vacation but varies around it, that annual hours worked fall by about 1 full time week with every week of paid vacation, that the gap between time taken and time paid for is higher for women, union members, and government workers, that hourly wage rates have a strong positive relationship with paid vacation weeks both in the cross section and across jobs, and that nonwage compensation is positively related to vacation weeks. We provide evidence that vacation leave is determined by broad employer policy rather than by negotiation between the worker and firm. In particular, it is strongly related to job seniority but depends very little on labor market experience, and for job changers it is only weakly related to the amount of vacation on the previous job.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 11693.

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Date of creation: Oct 2005
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Publication status: published as Joseph G. Altonji & Emiko Usui, 2007. "Work Hours, Wages, and Vacation Leave," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 60(3), pages 408-437, April.
Handle: RePEc:nbr:nberwo:11693
Note: LS
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