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Impact of overtime regulations on wages and work hours

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  • Kuroda, Sachiko
  • Yamamoto, Isamu

Abstract

Exploiting an ambiguity in the criteria regarding which employees are exempt from overtime regulations in Japan, this paper used the longitudinal data of Japanese employees to examine whether overtime regulations have an impact on hourly wages and hours worked. We found that although the differences between the hourly wages of the exempt and non-exempt employees were negligible, the hours worked by exempt employees were longer, especially for non-university graduates during the recessionary period. We interpreted that the fixed-wage model, rather than the fixed-job model, was prevalent during the recession period, especially for workers with low bargaining power.

Suggested Citation

  • Kuroda, Sachiko & Yamamoto, Isamu, 2012. "Impact of overtime regulations on wages and work hours," Journal of the Japanese and International Economies, Elsevier, vol. 26(2), pages 249-262.
    • Handle: RePEc:eee:jjieco:v:26:y:2012:i:2:p:249-262
    DOI: 10.1016/j.jjie.2012.01.003
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    References listed on IDEAS

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    1. Stephen J. Trejo, 2003. "Does the Statutory Overtime Premium Discourage Long Workweeks?," ILR Review, Cornell University, ILR School, vol. 56(3), pages 530-551, April.
    2. Alberto Abadie & David Drukker & Jane Leber Herr & Guido W. Imbens, 2004. "Implementing matching estimators for average treatment effects in Stata," Stata Journal, StataCorp LP, vol. 4(3), pages 290-311, September.
    3. David N. F. Bell & Robert A. Hart, 2003. "Wages, Hours, and Overtime Premia: Evidence from the British Labor Market," ILR Review, Cornell University, ILR School, vol. 56(3), pages 470-480, April.
    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. Mikal Skuterud, 2007. "Identifying the Potential of Work-Sharing as a Job-Creation Strategy," Journal of Labor Economics, University of Chicago Press, vol. 25(2), pages 265-287.
    6. Daniel S. Hamermesh & Stephen J. Trejo, 2000. "The Demand for Hours of Labor: Direct Evidence from California," The Review of Economics and Statistics, MIT Press, vol. 82(1), pages 38-47, February.
    7. 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.
    8. Friesen, Jane, 2001. "Overtime pay regulation and weekly hours of work in Canada," Labour Economics, Elsevier, vol. 8(6), pages 691-720, December.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. HASEBE Takuya & KONISHI Yoshifumi & SHIN Kong Joo & MANAGI Shunsuke, 2018. "White Collar Exemption: Panacea for long work hours and low earnings?," Discussion papers 18002, Research Institute of Economy, Trade and Industry (RIETI).
    2. ZHANG, Wei-Bin, 2013. "Habit Formation And Preference Change In A Twosector Growth Model With Elastic Labor Supply," Academica Science Journal, Economica Series, Dimitrie Cantemir University, Faculty of Economical Science, vol. 1(2), pages 3-20, May.
    3. Natsuki Arai & Masashige Hamano & Munechika Katayama & Yuki Murakami & Katsunori Yamada, 2022. "Nightless City: Impacts of Policymakers’ Questions on Overtime Work of Government Officials," Working Papers 2125, Waseda University, Faculty of Political Science and Economics, revised Oct 2023.

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    More about this item

    Keywords

    Wage; Hours worked; Overtime regulations; White-collar exemption; Fixed-job model; Fixed-wage model;
    All these keywords.

    JEL classification:

    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
    • K31 - Law and Economics - - Other Substantive Areas of Law - - - Labor Law

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