lonnie golden associate professor of economics and labor studies penn state university, abington...
TRANSCRIPT
Lonnie Golden
Associate Professor of Economics and Labor Studies
Penn State University, Abington College
1600 Woodland Rd.
Abington, PA 19001
(with Barbara Wiens-Tuers, Associate Professor of Economics, Penn State University, Altoona College)
Acknowledgements:
Alfred P. Sloan Foundation, Workplace, Workforce and Working Families Program Grant #B-2004-32, Bill Stull and David Pate on previous drafts.
Overtime Labor: Overtime Labor: Consequences for Worker Well Being Consequences for Worker Well Being
and Determinants at Workand Determinants at Work
OUTLINEI. Motivations:
Theoretical: economic models of labor supply to consider case of mandatory overtime (OT) work as subset of “overemployment”;
Empirical: Use unique survey questions from a recent General Social Survey (GSS) for a rare peer inside the black box of “welfare”—specific well-being effects associated with extra hours of labor supply, in particular when such work is required by an employer rather than strictly voluntary;
II. Document Net Consequences of OT work, with Multinomial Logistic Estimations contrasting effects of:Required/Mandatory OT (MOT) vs. Not Required OT;OT vs. No OT work,on various Outcomes: Stress/Fatigue, Work-Family Conflict, Mental Health
III. Identify Workplace and Labor Market characteristics associated with MOT.
IV. Conclusions & Implications for Research and Policy
Literatures Integrated Constrained Labor Supply
Determination of Work Hours via interaction of demand-side constraints and incentives with individual and household optimizing choices;
Occupational Health and Safety Psychological and physical consequences of choices and constraints;
Economics of Happiness and Well Being Complex relationship between income, work hours, working conditions
and satisfaction levels;
Work-Life-Family Integration Balance, Conflict, Interference, Boundaries, etc.
Work Organization High Performance Workplace, Labor Relations
Conventional Labor Supply Model of Suboptimal Utility with Overemployment—Unpreferred oversupply of some hours of labor
Leisure
Income/day
240
• If an individual is free to choose the number of hours of work, s/he chooses point U1, with 17 hours of leisure and 7 hours of work…
H
N
Y
U1
• If the individual is constrained to work a standard workday of 9 hours or none at all, s/he will choose point U2, lower than optimal utility level, overemployed by 2 hours per day.
U2
15 17
Worker Welfare (Utility) Function: Amended to consider the independent impact of flexibility in work hours and scheduling, to the extent it contributes to control over the timing of work hours, a valued tool to ease transitions between
leisure (L), household production (P). U = f (Y; L; P; ). utility is positive in the degree of flexibility in
scheduling () (= negative in the degree of inflexibility) to the extent this would ease transitions and facilitate coordination of work, household (P) and leisure (L) activities. If absence of hours autonomy is unaccompanied by
compensating wage (higher Y) or more non-work time, then utility is reduced.
A firm providing more flexibility in work timing can induce workers to accept lower compensation, while firms offering inflexible work conditions such as mandatory overtime (MOT) should be offering a compensating differential (higher wage)
Income/day
240
H (hours per day)
N
Y1 (at W1)
U1
15 17
Y2 (at W2)
U2
16
A worker may be no better off at U2, with shorter (e.g.,7) hours and an inflexible schedule, than at point U1, with longer (e.g., 9) although uncompensated hours that comes with a flexible schedule, even if the longer hours are greater than their preferred hours
Previous Survey Findings re: Extent of Mandatory OT: • Work in America Institute, 2003:
• 19% of unionized and 15% of non-union workers “work overtime that cannot be refused without facing penalty.”
Cornell University Institute for Workplace Studies, 1999: 18% of workers in sample worked overtime due to supervisory
pressure (#3 reason for OT work after financial strain and job insecurity).
Appelbaum and Berg, 1999: Among production workers, 2.34 on a scale of 1-4 were
“required to work overtime when you don’t want to.” Idson & Robbins, 1991:
16% of workers had both a penalty suffered if they refused OT work and hours of work determined primarily by their employer.
Despite this prevalence—little info re: the workplace or labor market conditions that produce it and its observable
consequences on indicators of worker well being—happiness, satisfaction, health, etc.
GSS’s key, unique question: Workers who responded “one or more days” to the
question, “How many days in a month during the last year did you work beyond your usual schedule?” were then asked,
“When you work overtime, is it mandatory (required by your employer)?”
Those who affirmed that they worked extra hours and answered yes to the question that overtime is mandatory, are then separated from workers with extra hours where the overtime is not mandatory, and from workers with no extra hours at all.
Table 1: General Social Survey 2002, Quality of Work Module, Basic Descriptive InformationNumber Mandatory
OvertimePercent Facing
Mandatory OvertimeMandatory
Overtime and Worked Extra
Hours
Percent MandatoryOvertime andExtra Hours
Full Sample 2765 461 17.7% 342 -
Labor Force 1917 461 24.1 342 17.8
Employed 1796 461 25.7 342 19.419.4
Full-time 1744 396 27.7 301 21.121.1
Part-time 312 50 16.0 41 9.1
Number of hours worked last week (mean)
Mandatory Overtime(n=461)
No Mandatory Overtime(n=1293)
All Employed Workers(n=1796)
Full-time 47.6 45.3 45.9
Part-time 23.3 22.7 22.6
Worked beyond usual schedule over the last year
75.4% ** 57.0% 66.3%
Number of days per month (mean)
7.1 4.9 5.5
**Difference between mandatory overtime and no mandatory overtime is significant at ρ < 0.05
Hypotheses: Distribution of Mandatory and non-mandatory OT work
varies by: Employees’ demographic characteristics; Employees’ job characteristics. Individuals’ capacity to absorb OT and unanticipated
work Effects of OT and MOT Work on workers involves tradeoffs:
more income (current or expected future) for less non-work (leisure and household production and reproduction) time and/or less control over timing of work and non-work hours. Incentives and rewards may offset risks to welfare.
Hours of both OT and MOT work, and lack of control over work hours, have separate, and thus additive or opposing effects on well being, relative to no OT work.
Table 2: Selected Demographics by Type of Overtime, 2002 GSS Extra
Hours: MOT
Extra Hours: Not MOT
Extra Hours: All
No Extra Hours
All Employed
n=342 n=733 n=1075 n=677 n=1787
Age in years (mean)
40.6 40 40.2 42.8 41.2
Distribution by gender (%)
Male 57.0† 51 52.9** 42.4 48.6
Female 43 49 47.1 57.2 51.4
Distribution by race (%)
White (may or may not be Hispanic) 77.5† 81 79.9* 76.2 78.3
Black 14 12.9 13.3* 16.4 14.6
Hispanic 8.5 6.7 8.1 9.4 8.1
Distribution by education (%)
Less than high school 9.4† 7.2 7.9** 12.6 9.8
High school graduate 53.2 49.7 50.8** 58.9 53.7
Associates 9.7 8.9 9.1 8.3 8.9
Bachelor 18.7 22.2 21.2** 14.2 18.4
Graduate degree 9.1† 12 11.1** 6.1 9.2
* Difference between All Extra Hours and No Extra Hours is significant at ρ < 0.10** Difference between All Extra Hours and No Extra Hours is significant at ρ < 0.05† Difference between Extra Hours: MOT and Extra Hours: Not MOT is significant at ρ < 0.10†† Difference between Extra Hours: MOT and Extra Hours: Not MOT is significant at ρ < 0.05
Key Work/Home Life Outcomes “How often do the demands of your job interfere with your family life?” the order of the responses is (1) often,
(2) sometimes, (3) rarely, and (4) never. How hard it is to “take time off to take
care of personal or family matters.” responses are (1) very hard, (2)
somewhat hard, (3) not too hard.
Key Stress/Fatigue Outcomes STRESS: How often do you find your work
stressful? USEDUP: How often during the past month have
you felt used up at the end of the day? TIREDHME: How often in the last three months
have you come home from work too tired to do the chores that need to be done?
HRSRELAX: After an average work day, about how many hours do you have to relax or pursue activities that you enjoy
Range of responses: Always/Very often; Often; Several times a month/week; Rarely; Never;
Extra Hours: MOTn=342
Extra Hours: Not MOT
n=733
Extra Hours: Alln=1075
No Extra Hoursn=677
All Employedn=1787
How often do demands of job interfere with family life? (%)
Often 23.4†† 12.1 15.7** 8.0 12.9
Sometimes 31.6 31.1 31.3** 19.2 26.3
Rarely/Never 45.0†† 56.8 53.0** 72.8 59.9
How hard is it to take time off during your work to take care of personal or family
matters?
Not at all hard 33.3†† 49.4 44.3** 50.9 46.5
Not too hard 27.5 27.3 27.4 26.6 26.8
Somewhat hard 21.9†† 13.9 16.5 13.6 15.1
Very hard 17.3†† 9.4 11.9* 8.3 10.5
How often during past 30 days felt used up at end of day?
Very often/often 47.1 45.3 45.9** 36.4 41.8
Sometimes 35.1 34.7 34.8 32.1 33.4
Rarely/never 17.8 19.7 19.2** 31.1 23.7
Table 4: Descriptive Comparison of Home/Family Related and Stress/Fatigue Outcomes by Type of Overtime Work
Continued…How often is work stressful?
Always/often 38.6† 34.5 35.8** 22.8 30.7Sometimes 42.4 45.6 44.8** 39.7 42.Hardly ever/never 18.7 19.7 19.5** 37.4 26.1
Come home from work too tired to do chores to be done (%)
Several times a week 28.6 30.9 30.1* 24.4 28.Several times a month 30.5†† 21.7 24.7 23.7 24.4Once or twice/never 39.6† 46.4 44.1 48.8 45.4
On an average work day, how many hours do you have to relax or pursue activities you enjoy?
• Mean number of hours (SD) 3.5 (2.5) 3.6 (2.4) 3.5 (2.6) 4.2 (3.5) 3.8 (2.9)
During the past 30 days, for how many days did your poor physical or mental health keep you from doing you usual activities such as work, self-care or recreation?
• Mean number of days (SD) 1.7 (5.2) 1.3 (4.0) 1.6 (5.1) 1.4 (4.4) 1.5 (4.7)• Zero days (%) 75.4 77.2 76.6 80.9 78.3
Fatigue effects apparent, but not Healthiness
Table 5: Descriptive Analysis: Economic Satisfaction OutcomesExtra Hours:
MOTn=342
Extra Hours: Not MOT
n=733
Extra Hours: Alln=1075
No Extra Hoursn=677
All Employedn=1787
Satisfaction with present financial situation (%)
(n=169) (n=376) (n=545) (n=335) (n=897)
Pretty well satisfied 30.2 31.1 30.8 30.5 30.6
More of less satisfied 42.6 46.0 45.0 42.7 43.9
Not satisfied at all 27.2† 22.9 24.2* 26.6 25.4
During past few years, has financial situation changed? (%)
(n=169) (n=376) (n=545) (n=335) (n=897)
Getting better 56.2 56.4 56.3** 45.4 52.2
Getting worse 18.9† 14.1 15.6 17.9 16.7
Stayed the same 24.9 29.5 28.1** 36.7 31.1
How does your income compare to other American families? (%)
(n=169) (n=376) (n=545) (n=335) (n=897)
Far below/ below average 26.7† 20.8 22.6** 34.1 26.8
Average 50.3 52.4 51.7* 46.9 49.7
Above/far above average 23.1 26.8 25.8** 18.8 23.2
Fringe benefits okay? (%)
Very/somewhat true 73.7† 77.6 76.4** 61.5 69.9
Not too/not true at all 26.0† 22.2 23.4** 38.0 28.8
If your job goes well are you likely to get a bonus or extra pay? (%)
Yes 23.1† 27.6 26.1** 21.7 24.1
Maybe 10.8†† 15.6 14.1 14.3 13.9
No 65.5†† 55.9 59.9** 63.5 60.3
Estimation Models: Multinomial logistic regression models are applied
here. The model estimating the true frequency of an outcome is given by:
Oj= β1overtimej + β2X2j + uj
The dependent variable Oj is one of the selected outcomes reported as ordered categories.
The independent variables are the type of overtime and a vector of control variables (X) including male, married, age and age squared, and whether or not the job is a ‘standard’ employment arrangement
N = 1,769 total employed
Conclusions: Required OT work exists for a non-negligible %, 1 in 4 of
the employed, lengthening by 2 hours their average hours. Extra work hours is associated with greater (in
order): Interference of job demands with family life; Stressfulness of work; Difficulty in taking time off during your work to take care of
personal or family matters; Feeling used up at end of day; too tired to do chores that need to be done. OT work does not statistically significantly reduce hours of
leisure (relaxing) or health (subjective self report).
Mandatory Overtime work has additive, adverse welfare effects (in order of strength): Interference of job with family life;
Difficulty taking off time for personal/family matters; Too tired to do chores; Stress from work.
No add-on effects on feeling used up, relaxation time or reported health.
OT work and economic satisfaction OT work is rewarded, with greater extra pay or $bonuses (more for non-mandatory than mandatory OT, however).
This leads to greater satisfaction among non-mandatory OT workers, but not among mandatory OT workers.
Thus, mandatory nature of some OT does not appear to be “compensated” with either time or money.
Employment, Job and Workplace Characteristics: Hypotheses:
Incidence of Mandatory OT work depends on: Employees’ demographic characteristics; Employees’ job characteristics. Industrial relations and work organization context
such as flexibility of the workplace; Incentives and rewards to offset welfare risk.
Table 3: Incidence and Distribution of Industry Classifications by Type of Overtime
Incidence Distribution
Industry Extra Hours: MOT (%)
Extra Hours: MOT
Extra Hours: Not MOT
No extra hours
All Employed
Agriculture, forestry, fisheries 32 2.3 0.7 1.6 1.4
Mining 60 0.9 0.14 0.2 0.3
Construction 21.1 7 7.4 5.2 6.4
Manufacturing-nondurables 24.8 9.1 6.1 6.9 7
Manufacturing-durables 16.2 5 6.6 5.5 5.9
Transportation, communications, public utilities
23.1 9.9 8.1 7.8 8.2
Wholesale trade 21 3.8 3.6 3.3 3.5
Retail trade 16.7 12.6 13.6 16.4 14.4
FIRE 13.3 4.1 6.8 5.6 5.9
Business and repair services 19.4 7 6.7 6.8 6.9
Personal services 11.3 2.3 3.4 5.6 3.9
Entertainment, recreation services
14.6 1.8 2.3 2.5 2.3
Professional services 17.3 24.3 29.5 25.3 26.9
Public Administration 27 9.9 5.2 7.4 7.1
Table 4: Distribution and Incidence of Occupations by Type of Overtime Incidence Distribution
Extra Hours: MOT(%)
Extra Hours: MOT
Extra Hours: Not MOT
NO extra hours
All Employed
OCCUPATION
Executive, administrative, managerial 20.6 17 17.7 12.6 15.7
Professional specialty 16.8 15.5 21.2 14.6 17.6
Technicians and related support 21.1 4.7 5.6 2.7 4.3
Sales 12.2 7 12.4 11.1 11
Administrative support 16.4 10.8 10 16.7 12.7
Service 20 15.8 12.8 17.3 15.1
Farming, fishing, forestry 31 2.6 1 1.9 1.6
Mechanics and repairers 25 4.1 4 1.9 3.1
Construction trades 20.3 4.1 4.2 3.6 3.9
Precision production 27.1 3.8 2.5 2.4 2.7
Machine operators, assemblers, inspectors
22.5 5.3 3.7 5 4.5
Transportation 21.3 4.7 2.5 5.9 4.2
Laborers 24.2 4.7 2.6 4.4 3.7
Table 5: Employment Characteristics by Type of Overtime Extra
Hours: MOTn=342
Extra Hours:
Not MOTn=733
Extra Hours:
Alln=1075
No Extra Hoursn=677
All Employed
n=1787
Flexible daily schedules
Often/sometimes 46.5†† 61.4 56.7** 50.4 53.8
Say about what happens on my job
Strongly agree/agree 70.2†† 80.6 77.3** 64.7 71.9
Normally works as part of a team 60.5 58.4 59.1** 54.2 56.6
Take part in decisions that affect me
Often/sometimes 81.0† 84.3 83.3** 70.8 77.6
Participate with others to set way job done
Often/sometimes 84.5 86.6 86.0** 72.8 80.2
Relationship with management
Very good/quite good 64.4†† 73.4 70.6 70 69.3
Eligible for performance based pay 38.3 39.6 24.8 33.2
Own stock in company (n=248) (n=557) (n=805) (n=537) (n=1369)
Yes 29.4 28.2 28.6 15.3 22.9
Chances for promotion good
Very true/somewhat true 57.3 59.2 58.6** 47.7 54
Job security good
Very true/somewhat true 82.2† 87.6 85.9** 82.1 83.6
Threatened or harassed at work in any other way (other than sex, race, gender, age) (%)
Yes 16.4†† 10.8 9.3* 12.6 11.2
Conditions on job allow me to be as productive as I could be
Table 6: Incidence of Selected Job Characteristics by Type of Overtime Extra Hours:
MOTExtra Hours:
Not MOTExtra Hours:
AllNo Extra Hours All Employed
Characteristics of Job n=342 n=733 n=1075 n=677 n=1787
Belong to labor union (n=250) (n=495) (n=745) (n=435) (n=1202)
Yes 13.6 13.3 13.4* 10.8 12.3
Tenure more than 1 year 82.8† 78.4 79.9** 71.8 76.1
Not easy to find job with same pay/benefits 44.7†† 36.6 39.2 40.5 39.2
RESPECT
Strongly Disagree 2.9†† 0.8 1.5 2.2 1.7
Day shift 67.3† 73.5 71.5 69.7 70
Way paid
Salaried 38.6 41.9 40.8** 23.6 33.8
Hourly 49.1 47.9 48.3** 63.1 53.3
Other 12.3 10.2 10.9 13.2 11.9
Respondent’s income category $25,000-29,000 $25,000-29,000 $25,000-29,000 $20,000-22,000 $22,500-24,999
How satisfied with job
Very-Somewhat 86.8†† 92 90.3** 86.9 88.2
Not too/not at all 13.2†† 7.9 9.6** 12.9 10.8
Source: 2002 General Social Survey* Difference between All Extra Hours and No Extra Hours is significant at ρ < 0.10** Difference between All Extra Hours and No Extra Hours is significant at ρ < 0.05† Difference between Extra Hours: MOT and Extra Hours: Not MOT is significant at ρ < 0.10†† Difference between Extra Hours: MOT and Extra Hours: Not MOT is significant at ρ < 0.05
Whether an individual in the sample reports working: mandatory overtime (beyond normal hours at least once last month), overtime but not mandatory, or no overtime,
+Y X + = noOTnonMOTMOT iii ,,
Logistic Regressions
is presumed to be dependent on three sets of observable factors. The likelihood of each depends on an individual (i) worker’s:
Personal characteristics () such as age, gender, race, marital and parental status or foreign born.
Income level, of the respondent or his/her family, education level.
Job and employer/organization characteristics (), such as occupation and industry of employment, union membership, hourly vs. salaried status, job tenure and various features of their compensation package and workplace relations between management and labor.
Relevant Variables and Measures in 2002 GSS OVERTIME WORK
MOREDAYS How many days per month do you work extra hours beyond your usual schedule?MUSTWORK When you work extra hours on your main job, is it mandatory (required by your employer)?WKVSFAM How often do the demands of your job interfere with your family life?USEDUP How often during the past month have you felt used up at the end of the day?FAMWKOFF How hard is it to take time off during your work to take care of personal or family mattersTIREDHME How often in the last three months have you come home from work too tired to do the chores that need to be done?STRESS How often do you find your work stressful?HRSRELAX After an average work day, about how many hours do you have to relax or pursue activities that you enjoy?
DEMOGRAPHIC CHARACTERISTICSage Age in yearsage2 Age in years squaredmale Respondent is malenonwhite Respondent is nonwhitemarried Respondent is marriedhsorless Respondent has a high school degree or lessinsmsa Respondent within an SMSA and a large or medium size central city, a suburb of a large city. homeowner Respondent owns or is buying place of residenceforeign Respondent was born in a foreign countrychilds Number of children
FAMILY INCOMEfaminc9999 Family income less than $10,000faminc19999 Family income between $10,000-19,999faminc39999 Family income between $20,000-39,999faminc49999 Family income between $40,000-49,999faminc59999 Family income between $50,000-59,999faminc74999 Family income between $60,000-74,999faminc89999 Family income between $75,000-89,999faminc109999 Family income between $90,000-109,999faminc110000 Family income equal to or greater than $110,000.
General Social Survey, QWL, 2002Key Empirical Findings
Factors positively associated with working mandatory OT Demographic factors:
Male, but due to occupation and industry Foreign-Born, but due to job factors
Job factors: Job tenure greater than one year More frequent overtime work Not easy to find another job Certain occupations—transportation, precision production (non-
construction), managerial. Certain industries—mining, non-durables manufacturing, public
admin., transportation-utilities-communications, and non-profits. Union, although due to occupation and industry. Involvement in Decision-making
Factors associated with reduced likelihood of working mandatory OT Flexible daily scheduling
Employed in professional services, finance-insurance-real estate industries and in professional specialty, sales and administrative support type jobs
Part-time and shorter standard work hours Good labor-management relations, much say
in job content.
Conclusions: Tradeoffs from working mandatory OT
Mandatory OT work is associated with lack of control over job content and scheduling and poor labor-management environment.
However, working mandatory OT is rewarded, with greater $bonuses, participation in decision-making and increases satisfaction with life through work.
Future Research?
Splits by: Gender, Salaried vs. Hourly Employees Income Level re: well being effects
Disentangle effects: daily schedule flexibility from MOT Incentives vs. coercion Workplace structures vs. job market state
Potential Policies that would improve living standards by addressing OT work and Mandatory nature of some OT work
Legislation: Right to Refuse Minimum Advance Notification Limiting length and incidence of MOT work, by:
State (Mainly Nurses and Health Care Workers) Federal Legislation (amending Fair Labor Standards Act
Overtime Law and Regulations) Global: Extending the ILO convention principle of prohibiting forced
or compulsory labor, to grant all workers a right to refuse overtime work without suffering the severest penalty in market economies--job loss.