Overtime work: A review of literature and initial empirical analysis Dominique Anxo Mattias Karlsson CONDITIONS OF WORK AND EMPLOYMENT SERIES No. 104 INWORK Conditions of Work and Employment Series No. 104 Inclusive Labour Markets, Labour Relations and Working Conditions Branch Overtime work: A review of literature and initial empirical analysis Dominique Anxo * Mattias Karlsson ** * Department of Economics and Statistics, School of Business and Economics, Linnaeus University ** Independent researcher, Linnaeus University INTERNATIONAL LABOUR OFFICE - GENEVA Copyright © International Labour Organization 2019 Publications of the International Labour Office enjoy copyright under Protocol 2 of the Universal Copyright Convention. Nevertheless, short excerpts from them may be reproduced without authorization, on condition that the source is indicated. 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Conditions of work and employment series ; no. 104, ISSN: 2226-8944 (print); 2226-8952 (web pdf) First published 2019 Cover: DTP/Design Unit, ILO The designations employed in ILO publications, which are in conformity with United Nations practice, and the presentation of material therein do not imply the expression of any opinion whatsoever on the part of the International Labour Office concerning the legal status of any country, area or territory or of its authorities, or concerning the delimitation of its frontiers. The responsibility for opinions expressed in signed articles, studies and other contributions rests solely with their authors, and publication does not constitute an endorsement by the International Labour Office of the opinions expressed in them. Reference to names of firms and commercial products and processes does not imply their endorsement by the International Labour Office, and any failure to mention a particular firm, commercial product or process is not a sign of disapproval. Information on ILO publications and digital products can be found at: www.ilo.org/publns. Printed in Switzerland. Table of contents 1. Introduction ..................................................................................................................... 1 2. Definitions of overtime .................................................................................................... 2 2.1 The role of working time thresholds and compensation in defining overtime ....................... 2 2.2 Overtime: The role of the European Working Time Directive .............................................. 4 2.3 Working time and overtime regulations – A European perspective ...................................... 6 3. Literature review ............................................................................................................. 7 3.1 The supply and demand of overtime hours: A theoretical perspective .................................. 7 3.1.1 The supply of overtime ................................................................................................. 7 3.1.2 The demand of overtime ............................................................................................... 8 3.2 Overtime: Empirical studies ................................................................................................ 11 3.2.1 Incidence of overtime ................................................................................................. 11 3.2.2 Empirical evidence on the individual consequences of overtime and long hours....... 12 4. Methodological considerations: Selection of countries .............................................. 12 5. Institutional frameworks and regulations in the six selected countries ................... 14 5.1 Denmark ............................................................................................................................... 14 5.2 Germany ............................................................................................................................... 14 5.3 Romania ............................................................................................................................... 15 5.4 Spain .................................................................................................................................... 15 5.5 Turkey .................................................................................................................................. 16 5.6 United Kingdom ................................................................................................................... 16 6. Data ................................................................................................................................. 18 6.1 Data description and methodological considerations ........................................................... 18 6.2 Data limitation and estimations techniques ......................................................................... 18 7. Working time regimes and incidence of overtime and excess hours in the six selected countries ........................................................................................................... 19 7.1 Duration of working time ..................................................................................................... 19 7.2 Working time distribution among wage earners .................................................................. 20 7.3 Overtime in the six selected countries ................................................................................. 25 7.4 Overtime: A life course perspective ..................................................................................... 27 7.4.1 Stylized household life course typologies ................................................................... 27 7.4.2 Variation of overtime hours across the life course ...................................................... 28 8. Overtime: An econometric approach .......................................................................... 32 8.1 Factor affecting the likelihood to work overtime or to report paid overtime ....................... 32 8.2 Factors affecting the duration of overtime ........................................................................... 34 9. Concluding remarks ...................................................................................................... 37 References ............................................................................................................................. 40 Appendix A: Descriptive Statistics ..................................................................................... 43 Appendix B: Diagrams ......................................................................................................... 47 Appendix C: Results of estimations .................................................................................... 52 Conditions of Work and Employment Series No. 104 iii Tables Table 1: Overview on statistical definitions with commentaries ................................................................................. 3 Table 2: Main institutional levels of regulation of working time in EU Member States ............................................ 6 Table 3: Theoretical effects of a regulatory attempt to dampen the demand for overtime hours by a raise in the overtime premium ............................................................................................................................................ 11 Table 4: Criteria’s for the selection of countries: Form of welfare state capitalism, working time regimes, level of regulation and key actors ............................................................................................................................. 13 Table 5. Summary of institutional frameworks in our six selected countries (based on desk research and interviews) ........................................................................................................................................................ 17 Table 6: Estimated share of dependent employees working overtime (paid and unpaid) by gender and country (percentage) ...................................................................................................................................................... 26 Table 7: Share of full-time wage earners reporting paid overtime by gender and country wage earners (percentage) ...................................................................................................................................................... 26 Table 8: Estimated average weekly overtime hours (paid and unpaid) by gender and country, dependent employees, in hours per week as well as average weekly overtime hours given that the employee is working overtime ............................................................................................................................................. 27 Table 9: Logit regression pooled data, dependent variable: Actual overtime and paid overtime. All employees ... 33 Table 10: Tobit regression pooled data, dependent variable, weekly overtime hours,