Are longer hours reducing productivity in manufacturing?

Edward Shepard (Le Moyne College, Syracuse, New York, USA)
Thomas Clifton (Le Moyne College, Syracuse, New York, USA)

International Journal of Manpower

ISSN: 0143-7720

Publication date: 1 November 2000

Abstract

This paper provides statistical evidence of the effects of overtime hours on worker productivity using aggregate panel data for 18 manufacturing industries within the US economy. An economic production function model is specified and estimated using data for the years 1956‐1991 provided by the US Department of Labor, Bureau of Labor Statistics, the US Department of Commerce, and the Federal Reserve Board. Standard approaches are applied to specify and estimate a factor‐augmented production function model, with possible effects of overtime on productivity incorporated through the specification of factor effort functions. The empirical results suggest that use of overtime hours lowers average productivity, measured as output per worker hour, for almost all of the industries included in the sample. These results hold up under several alternative specifications and estimation techniques, including controls or corrections for autocorrelation, heteroskedasticity, rates of capacity utilization, and possible endogeneity of the constructed variable representing use of overtime hours.

Keywords

Citation

Edward Shepard and Thomas Clifton (2000) "Are longer hours reducing productivity in manufacturing?", International Journal of Manpower, Vol. 21 No. 7, pp. 540-553

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DOI

: https://doi.org/10.1108/01437720010378999

Publisher

:

MCB UP Ltd

Copyright © 2000, MCB UP Limited

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