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April 2007, Vol. 130, No. 4
Overemployment mismatches: the preference for fewer hours
Lonnie Golden and Tesfayi Gebreselassie
While workers’ preferences regarding work hours by their nature are not directly observable, restrictions on individuals’ choice of hours of work in a given job are widely acknowledged as a central feature of the labor market and, in many conventional economic studies, of labor supply. For the purpose of this article, overemployment occurs when a worker’s desired hours of labor supply is exceeded by hours of labor demanded at their current pay rate. This article identifies empirically the demographic and job factors associated with being "overemployed," and the extent one may be willing to reduce hours of work at one’s current (or suitable alternative) job for less income. Unlike previous studies of hours constraints, the focus here is less on underemployment—the desire for more hours and income—even though underemployment is more common and may be more adverse to worker welfare.1 However, overemployment has considerable spillover (hidden) social costs. Facilitating a reduction in overemployment with appropriately targeted policy may potentially reduce the extent of underemployment, at least in sectors and workplaces where they co-exist.2
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1 René Böheim and Mark P. Taylor, "Actual and Preferred Working Hours," British Journal of Industrial Relations, 2004, vol. 42, no. 1, pp. 149-66. L. F. Dunn, "Loss Aversion and Adaptation in the Labor Market: Empirical Indifference Functions and Labor Supply," Review of Economics and Statistics, August 1996, pp. 441–50; Peter Feather and Douglass Shaw, "The Demand for Leisure Time in the Presence of Constrained Work Hours," Economic Inquiry, 2000, vol. 38, no. 4, pp. 651–62; Kevin Lang and Shulamit Kahn, "Hours Constraints: Theory, Evidence and Policy Implications," in G. Wong and G. Picot, eds., Working Time in a Comparative Perspective, Volume 1 (Kalamazoo, MI, Upjohn Institute for Employment Research, 2001). R. Drago, Y.-P. Tseng, and M. Wooden, "Usual and preferred working hours in couple households, Journal of Family Studies, vol. 11, pp. 46–61. The self-reporting of hours constraints has been validated by the finding that workers who preferred fewer hours and changed their job actually did lower their hours by 2 per week, while those job changers who preferred more hours raised hours by more than 3 hours per week (Joseph Altonji and Christina Paxson, "Labor Supply Preferences, Hours Constraints and Hours-Wage Trade-Offs," Journal of Labor Economics, vol. 6, no. 2, April 1988, pp. 254–76).
2 Better matching between preferred and actual hours status is associated with in-role and extra-role performance of employees. Overemployment may lead to work behaviors antithetical to productivity, including greater absenteeism, tardiness, use of sick-time, or on-the-job leisure (Jackie Krasas Rogers, "There’s No Substitute: The Politics of Time Transfer in the Teaching Profession," Work and Occupations, February 2001, pp. 64–92; Brooks Holtom, Simon Tidd, and Thomas Lee, "The Relationship Between Work Status Congruence and Work-Related Attitudes and Behaviors," Journal of Applied Psychology, October 2002, pp. 903–23; I. J. H. Van Emmerikand and Karin Sanders, "Mismatch in Working Hours and Effective Commitment," Journal of Managerial Psychology, 2005, vol. 20, no. 8, pp. 712–26).
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