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Working Time and the Impact of Policy Institutions: Reforming the Overtime Hours Law and Regulation

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  • Lonnie Golden

Abstract

This paper analyzes implications for worker well-being if legislation in the U.S. Congress is passed permitting employers and non-supervisory employees who agree to substitute future compensatory time off in lieu of premium pay for overtime work, calculated over an 80-hour two-week standard. The impact on worker welfare is predicted applying augmented worker utility and employer demand for hours functions. Plausible inter-temporal scenarios suggest that unless workers gain more control over the timing of their overtime and comp time hours, they are likely to experience a net loss in welfare. This will occur to the extent employers use the new overtime regulation to vary work hours and schedules more closely with fluctuations in output demand as opposed to better customizing work hours to fit workers' needs to balance work with competing demands on their time, that is, adopting a short rather than longer-run time horizon regarding the restraint of labor costs. Alternative policies are more likely to raise welfare.

Suggested Citation

  • Lonnie Golden, 1998. "Working Time and the Impact of Policy Institutions: Reforming the Overtime Hours Law and Regulation," Review of Social Economy, Taylor & Francis Journals, vol. 56(4), pages 522-541.
    • Handle: RePEc:taf:rsocec:v:56:y:1998:i:4:p:522-541
    DOI: 10.1080/00346769800000048
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    References listed on IDEAS

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    1. Barry Bluestone & Stephen Rose, 1997. "The Growth in Work Time and the Implications for Macro Policy," Economics Working Paper Archive wp_204, Levy Economics Institute.
    2. Daniel S. Hamermesh, 1996. "Workdays, Workhours, and Work Schedules: Evidence for the United States and Germany," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number www, December.
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    Cited by:

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    2. 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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