The Short-Run Impacts of Raising the Overtime Premium or Reducing the Standard Workweek on Employment, Hours, and Earnings in U.S. Manufacturing

Galiya Sagyndykova, Ronald Oaxaca

Research output: Working paper

Abstract

A nine factor input model is used to obtain the monthly demand for employment and weekly hours in U.S. Manufacturing under long-term profit maximization. The input demand functions correspond to employment and weekly hours of overtime and non-overtime production and non-production workers as well as capital. Model specification incorporates the functional form derived from a Cobb-Douglas production technology with cross-equation restrictions. Data for model estimation are obtained from Current Employment Statistics, Employer Cost for Employee Compensation, Federal Reserve Economic Data, Bureau of Economic Analysis, National Bureau of Economic Research, and Current Population Survey. Policy simulations are conducted to estimate the short-run effects of a) raising the overtime premium to double-time, and b) reducing the standard workweek to 35 hours. The outcome variables are factor specific and total employment, weekly hours, and earnings as well as the employment of capital and the returns to capital.
LanguageEnglish
Publication statusIn preparation - 2017

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Premium
Manufacturing
Short-run
Overtime
Workers
Profit maximization
Current population survey
Economic analysis
Policy simulation
Production technology
Demand function
Employers
Functional form
Model specification
Federal Reserve
Factors
Costs
Statistics
Input demand
Cobb-Douglas

Cite this

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title = "The Short-Run Impacts of Raising the Overtime Premium or Reducing the Standard Workweek on Employment, Hours, and Earnings in U.S. Manufacturing",
abstract = "A nine factor input model is used to obtain the monthly demand for employment and weekly hours in U.S. Manufacturing under long-term profit maximization. The input demand functions correspond to employment and weekly hours of overtime and non-overtime production and non-production workers as well as capital. Model specification incorporates the functional form derived from a Cobb-Douglas production technology with cross-equation restrictions. Data for model estimation are obtained from Current Employment Statistics, Employer Cost for Employee Compensation, Federal Reserve Economic Data, Bureau of Economic Analysis, National Bureau of Economic Research, and Current Population Survey. Policy simulations are conducted to estimate the short-run effects of a) raising the overtime premium to double-time, and b) reducing the standard workweek to 35 hours. The outcome variables are factor specific and total employment, weekly hours, and earnings as well as the employment of capital and the returns to capital.",
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N2 - A nine factor input model is used to obtain the monthly demand for employment and weekly hours in U.S. Manufacturing under long-term profit maximization. The input demand functions correspond to employment and weekly hours of overtime and non-overtime production and non-production workers as well as capital. Model specification incorporates the functional form derived from a Cobb-Douglas production technology with cross-equation restrictions. Data for model estimation are obtained from Current Employment Statistics, Employer Cost for Employee Compensation, Federal Reserve Economic Data, Bureau of Economic Analysis, National Bureau of Economic Research, and Current Population Survey. Policy simulations are conducted to estimate the short-run effects of a) raising the overtime premium to double-time, and b) reducing the standard workweek to 35 hours. The outcome variables are factor specific and total employment, weekly hours, and earnings as well as the employment of capital and the returns to capital.

AB - A nine factor input model is used to obtain the monthly demand for employment and weekly hours in U.S. Manufacturing under long-term profit maximization. The input demand functions correspond to employment and weekly hours of overtime and non-overtime production and non-production workers as well as capital. Model specification incorporates the functional form derived from a Cobb-Douglas production technology with cross-equation restrictions. Data for model estimation are obtained from Current Employment Statistics, Employer Cost for Employee Compensation, Federal Reserve Economic Data, Bureau of Economic Analysis, National Bureau of Economic Research, and Current Population Survey. Policy simulations are conducted to estimate the short-run effects of a) raising the overtime premium to double-time, and b) reducing the standard workweek to 35 hours. The outcome variables are factor specific and total employment, weekly hours, and earnings as well as the employment of capital and the returns to capital.

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