An official website of the United States government
United States Department of Labor
United States Department of Labor
The .gov means it's official.
Federal government websites often end in .gov or .mil. Before sharing sensitive information,
make sure you're on a federal government site.
The site is secure.
The
https:// ensures that you are connecting to the official website and that any
information you provide is encrypted and transmitted securely.
Office of Survey Methods Research
SHARE ON:
More Information
Published Year: 2007
Survey/Program(s): Compensation and Working Conditions
Catalog: Economic Working Paper
WP Number: WP-402
Publication Status / Disposition: Available in the Compensation and Working Conditions (January 2007).
Download PDF
Some New Evidence on Overtime Use, Total Job Compensation, and Wage Rates
Abstract
This paper is a replication of research reported by Steven Trejo in the 1991 American Economic Review. Trejo used labor force data from the seventies to assess the relevance of two contrasting views of the impact of overtime pay regulation. This paper reports research using a recent representative sample of U.S. private industry jobs that includes employer-reported measures of usual annual hours of overtime work and comprehensive measures of employer costs for job compensation. Comparisons are made between a set of jobs likely to be subject to U.S. overtime pay regulation-jobs paid hourly on 40 hour a week schedules-with another set of jobs that can offer overtime but are not likely to be subject to Federal overtime requirements-jobs on reduced hour schedules. The main findings of the research are: (1) higher wage rates are associated with a lower incidence of overtime work among the set of jobs with 40 hour work schedules, but not among the set of jobs with reduced hour schedules (2) in jobs using overtime work, more usual overtime work is associated with lower wage rates among the jobs with 40 hour work schedules, but not among the jobs on reduced hour schedules (3) higher "quasi-fixed" job compensation, such as employer health insurance costs, is associated with a higher incidence of overtime use. The paper also discusses some of the difficulties of interpreting these statistical results in the context of the labor market models considered by Trejo.