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Appears in Collections:Economics Journal Articles
Peer Review Status: Refereed
Title: Wage-hours contracts, overtime working and premium pay
Authors: Hart, Robert A
Ma, Yue
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Keywords: Wage-hours contracts
Premium pay
Specific human capital
Asymmetric information
Issue Date: Jan-2010
Publisher: Elsevier for the European Association of Labour Economists
Citation: Hart RA & Ma Y (2010) Wage-hours contracts, overtime working and premium pay, Labour Economics, 17 (1), pp. 170-179.
Abstract: This paper offers a contract-based theory to explain the determination of standard hours, overtime hours and overtime premium pay. We expand on the wage contract literature that emphasises the role of firm-specific human capital and that explores problems of contract efficiency in the face of information asymmetries between the firm and the worker. We first explore a simple wage-hours contract without overtime and show that incorporating hours into the contract may itself produce efficiency gains. We then show how the introduction of overtime hours, remunerated at premium rates, can further improve contract efficiency. Our modelling outcomes in respect of the relationship between the overtime premium and the standard wage rate relate closely to earlier developments in hedonic wage theory. Throughout, we emphasise the intuitive reasoning behind the theory and we also supply relevant empirical evidence. Mathematical derivations are provided in an Appendix.
Type: Journal Article
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Rights: The publisher does not allow this work to be made publicly available in this Repository. Please use the Request a Copy feature at the foot of the Repository record to request a copy directly from the author. You can only request a copy if you wish to use this work for your own research or private study.
Affiliation: Economics
Lingnan University

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