1991Economic InquiryRequires access

DETERMINANTS OF VOLUNTARY OVERTIME DECISIONS

Todd L. Idson, Philip K. Robins

Open publisher page 15 citations

Abstract

This paper develops and estimates a model of the labor supply for overtime work when some workers' choices are constrained by mandatory overtime provisions of employers. Economic incentives are shown to have a significant effect on workers' overtime decisions. Policy simulations suggest that an increase in the overtime premium would lead to greater voluntary overtime work, as would a lowering of the level of weekly hours after which the mandatory premium takes effect. The estimated effects of these changes are not quantitatively large, indicating that workers are fairly insensitive to changes in monetary incentives in making overtime decisions.

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What this paper is about

This paper develops and estimates a model of the labor supply for overtime work when some workers' choices are constrained by mandatory overtime provisions of employers. Economic incentives are shown to have a significant effect on workers' overtime decisions. Policy simulations suggest that an increase in the overtime premium would lead to greater voluntary overtime work, as would a lowering of the level of weekly hours after which the mandatory premium takes effect. The estimated effects of these changes are not quantitatively large, indicating that workers are fairly insensitive to changes in monetary incentives in making overtime decisions.

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Available abstract

This paper develops and estimates a model of the labor supply for overtime work when some workers' choices are constrained by mandatory overtime provisions of employers. Economic incentives are shown to have a significant effect on workers' overtime decisions. Policy simulations suggest that an increase in the overtime premium would lead to greater voluntary overtime work, as would a lowering of the level of weekly hours after which the mandatory premium takes effect. The estimated effects of these changes are not quantitatively large, indicating that workers are fairly insensitive to changes in monetary incentives in making overtime decisions.

Key concepts: Overtime, Incentive, Turnover, Economics, Work (physics), Labour economics, Microeconomics, Engineering

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