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The Structure of Labor Costs with Overtime Work in U.S. Jobs

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  • Anthony Barkume

Abstract

The author analyzes employment contract and labor demand models of the Fair Labor Standards Act overtime pay regulation to determine their effects on employers' labor costs. Using National Compensation Survey data to obtain a representative sample of U.S. private-industry jobs, he assesses each model's ability to predict either the adjustment of wage rates if overtime is warranted (the employment contract model) or the probability of using overtime to meet labor demands (the labor demand model). Using quasi-fixed employment costs as independent variables allows for a better accounting of labor demand. He finds that lower wages go hand-in-hand with jobs requiring more overtime work, which indicates that overtime pay regulation influences the structure of compensation.

Suggested Citation

  • Anthony Barkume, 2010. "The Structure of Labor Costs with Overtime Work in U.S. Jobs," ILR Review, Cornell University, ILR School, vol. 64(1), pages 128-142, October.
    • Handle: RePEc:sae:ilrrev:v:64:y:2010:i:1:p:128-142
    DOI: 10.1177/001979391006400106
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    References listed on IDEAS

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    1. Barkume, Anthony J., 2007. "Some New Evidence on Overtime Use, Total Job Compensation, and Wage Rates," Working Papers 402, U.S. Bureau of Labor Statistics.
    2. Hart, Robert A. & Ma, Yue, 2000. "Why Do Firms Pay an Overtime Premium?," IZA Discussion Papers 163, Institute of Labor Economics (IZA).
    3. 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.
    4. 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.
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    Cited by:

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    2. Charles C. Brown & Daniel S. Hamermesh, 2019. "Wages and Hours Laws: What Do We Know? What Can Be Done?," NBER Working Papers 25942, National Bureau of Economic Research, Inc.
    3. Rafael Gralla & Kornelius Kraft & Stanislav Volgushev, 2017. "The effects of works councils on overtime hours," Scottish Journal of Political Economy, Scottish Economic Society, vol. 64(2), pages 143-168, May.

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