Overtime work: a review of literature and initial empirical analysis

Produced by: 
International Labour Office
Available from: 
March 2019
Paper author(s): 
Dominique Anxo
Mattias Karlsson
Topic: 
Theory
Year: 
2019

Taking a theoretical and empirical perspective, this report analyses and assesses the incidence and rational for overtime work with a special focus on the European situation1 . There are strong reasons to believe that the incidence of overtime work is dependent upon interrelated economic, societal and institutional factors. The type of industrial relations systems and the regulatory framework, particularly as regards the level at which working time is determined (national, industry or company level) are constitutive elements of national working time regimes. Over and above an analysis of the regulatory framework, which is crucial for understanding the crosscountry disparities in the distribution of working time and the incidence of long working hours, other economic and societal factors may shape and affect the incidence of overtime and excessive hours. For example, the shape of wage distribution and the size of overtime premiums (and/or time off in lieu) may affect both the demand and supply of overtime. Parallel to studies analysing the role of the institutional set-up in explaining cross-country diversity in the incidence of overtime, a growing number of empirical studies have focused on the individual and societal consequences of excessive working hours on health and well-being2 . In this context, overwhelming empirical evidence has begun to demonstrate shown that persistent exposure to long working hours has detrimental effect on workers’ safety, health and work-life balance. To illustrate: the risk of accidents is not only proportional to the number of hours worked, but rises at an exponential rate above a certain hour-threshold. While health and safety is an important issue, the use of overtime is also an important element of companies’ flexibility strategies. Employers are sometimes facing unforeseen variations in demand and overtime might be an efficient tool to cope with short run variations of output across the business cycle. The additional income for employees constitutes also a central dimension and for some workers overtime might be a substantive source of additional revenue. For workers with very low wages, overtime may be a structural necessity to make ends meet.

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