Constrained by hours and restricted in wages: The quality of matches in the labor market

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Abstract

This paper examines the explicit loss born by workers who face constraints in their working hours by analyzing differences in actual and desired hours and wages. Men tend to be underemployed while women are evenly split between over- and underemployment. Losses in surplus are generally small, but 10% of underemployed men and women experience losses of more than 34% or 50% of surplus, respectively. The loss measure is also an important determinant in predicting labor market transitions, meaning increases in surplus losses generate a higher probability of changing from workers’ present jobs or changing the number of hours. (JEL J22, J41)
Original languageEnglish
Pages (from-to)512-529
Number of pages18
JournalEconomic Inquiry
Volume47
Issue number3
Early online date10 Jul 2008
DOIs
Publication statusPublished - Jul 2009

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Keywords

  • reservation wages
  • desired hours
  • job mobility
  • supply model
  • work
  • youth
  • search
  • time
  • willingness
  • flexibility

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