Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/90069
Authors: 
Hart, Robert A.
Ma, Yue
Year of Publication: 
2013
Series/Report no.: 
IZA Discussion Paper 7560
Abstract: 
We present a wage-hours contract designed to minimize costly job turnover given investments in on the job 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 job 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.
Subjects: 
paid overtime
wage-hours contract
plant and machine operatives
JEL: 
J41
J33
Document Type: 
Working Paper

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