Individual-based studies of overtime

Much of the micro evidence on factors affecting the incidence and the number of hours of overtime working is based on two contrasting labour markets. At one end of the spectrum, the US market is highly regulated in that, for most firms, the hours eligible for premium payments and the minimum level of the premium are set by legislation. At the other, the UK market is unregulated as far as overtime practices are concerned. Here, we concentrate attention on these two markets along with a third, the German labour market. Germany has not experienced legislation with the coverage of the United States. However, recent governments as well as large unions have adopted much more interventionist working time approaches than their UK counterparts.

Taking the lead from the work by Trejo (1993) for the United States, two additional studies provide micro evidence on the incidence and hours of overtime working. Bauer and Zimmermann (1999) report findings for Germany while Bell and Hart (2000) study the United Kingdom. The effects of several key explanatory variables on the numbers of overtime hours worked are provided by the Tobit estimates shown in column (1) under each labour market in table 5.1. Columns (2) and (3) contain the decomposition proposed by McDonald and Moffitt (1980). This shows the effects of each explanatory variable on the probability of overtime incidence and on the expected number of overtime hours of those working overtime.