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Appears in Collections:Economics Working Papers
Peer Review Status: Unrefereed
Title: Overtime Working and Contract Efficiency
Author(s): Hart, Robert A
Ma, Yue
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Citation: Hart RA & Ma Y (2013) Overtime Working and Contract Efficiency. Stirling Economics Discussion Paper, 2013-07.
Keywords: Paid overtime, wage-hours contract, plant and machine operatives
JEL Code(s): J41: Labor Contracts
J33: Compensation Packages; Payment Methods
Issue Date: 31-May-2013
Date Deposited: 22-May-2013
Series/Report no.: Stirling Economics Discussion Paper, 2013-07
Abstract: We present a wage-hours contract designed to minimize costly turnover given investments in specific training combined with firm and worker information asymmetries. It may be optimal for the parties to work ‘long hours' remunerated at premium rates for guaranteed overtime hours. Based on British plant and machine operatives, we test three predictions. First, trained workers with longer tenure are more likely to work overtime. Second, hourly overtime pay exceeds the value of marginal product while the basic hourly wage is less than the value of marginal product. Third, the basic hourly wage is negatively related to the overtime premium.
Type: Working Paper
Affiliation: Economics
The Chinese University of Hong Kong

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