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Work Hours, Wages, and Vacation Leave

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  • Joseph G. Altonji
  • Emiko Usui
Abstract
Using the Panel Study of Income Dynamics and the Health and Retirement Study, we provide a set of facts about vacation leave and its relationship to hours worked, hours constraints, wage rates, worker characteristics, spouse's vacation leave, labor market experience, job tenure, occupation, industry, and labor market conditions. We show that on average vacation time taken rises 1 to 1 with paid vacation but varies around it, that annual hours worked fall by about 1 full time week with every week of paid vacation, that the gap between time taken and time paid for is higher for women, union members, and government workers, that hourly wage rates have a strong positive relationship with paid vacation weeks both in the cross section and across jobs, and that nonwage compensation is positively related to vacation weeks. We provide evidence that vacation leave is determined by broad employer policy rather than by negotiation between the worker and firm. In particular, it is strongly related to job seniority but depends very little on labor market experience, and for job changers it is only weakly related to the amount of vacation on the previous job.

Suggested Citation

  • Joseph G. Altonji & Emiko Usui, 2005. "Work Hours, Wages, and Vacation Leave," NBER Working Papers 11693, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:11693
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    2. Oshio, Takashi & Usui, Emiko, 2018. "How does informal caregiving affect daughters’ employment and mental health in Japan?," Journal of the Japanese and International Economies, Elsevier, vol. 49(C), pages 1-7.
    3. Mark Aguiar & Erik Hurst, 2006. "Measuring trends in leisure," Proceedings, Federal Reserve Bank of San Francisco.
    4. Ali Fakih, 2014. "Vacation Leave, Work Hours, and Wages: New Evidence from Linked Employer–Employee Data," LABOUR, CEIS, vol. 28(4), pages 376-398, December.
    5. Emiko Usui & Satoshi Shimizutani & Takashi Oshio, 2016. "Are Japanese Men of Pensionable Age Underemployed or Overemployed?," The Japanese Economic Review, Springer, vol. 67(2), pages 150-168, June.
    6. Inkmann, Joachim, 2006. "Compensating wage differentials for defined benefit and defined contribution occupational pension scheme benefits," LSE Research Online Documents on Economics 24516, London School of Economics and Political Science, LSE Library.
    7. Stéphanie Lluis & Jean Abraham, 2013. "The Wage–Health Insurance Trade-off and Worker Selection: Evidence From the Medical Expenditure Panel Survey 1997 to 2006," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 52(2), pages 541-581, April.
    8. M. Keith Chen & Judith A. Chevalier & Peter E. Rossi & Emily Oehlsen, 2019. "The Value of Flexible Work: Evidence from Uber Drivers," Journal of Political Economy, University of Chicago Press, vol. 127(6), pages 2735-2794.
    9. Gene Amromin & Carrie Jankowski & Richard D. Porter, 2007. "Transforming payment choices by doubling fees on the Illinois Tollway," Economic Perspectives, Federal Reserve Bank of Chicago, vol. 31(Q II), pages 22-47.
    10. Haynes, Jonathan B. & Sessions, John G., 2013. "Work now, pay later? An empirical analysis of the pension–pay trade off," Economic Modelling, Elsevier, vol. 30(C), pages 835-843.
    11. Thomas Hofmarcher, 2021. "The effect of paid vacation on health: evidence from Sweden," Journal of Population Economics, Springer;European Society for Population Economics, vol. 34(3), pages 929-967, July.
    12. Mark Aguiar & Erik Hurst, 2007. "Measuring Trends in Leisure: The Allocation of Time Over Five Decades," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 122(3), pages 969-1006.
    13. Ali Fakih, 2018. "What Determines Vacation Leave? The Role Of Gender," Bulletin of Economic Research, Wiley Blackwell, vol. 70(1), pages 1-19, January.
    14. Ana I. Moro Egido & Joaquin Naval & Jose I. Silva, 2023. "Part-time hours and wages," ThE Papers 23/06, Department of Economic Theory and Economic History of the University of Granada..
    15. Oshio, Takashi & Usui, Emiko, 2017. "The effects of providing eldercare on daughters’ employment and mental health in Japan," CIS Discussion paper series 661, Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University.
    16. Laszlo Goerke & Sabrina Jeworrek & Markus Pannenberg, 2015. "Trade union membership and paid vacation in Germany," IZA Journal of Labor Economics, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-26, December.
    17. Forth, John & Bryson, Alex, 2018. "State Substitution for the Trade Union Good: The Case of Paid Holiday Entitlements," IZA Discussion Papers 11615, Institute of Labor Economics (IZA).
    18. L. Bryan, Mark, 2006. "Paid holiday entitlements, weekly working hours and earnings in the UK," ISER Working Paper Series 2006-52, Institute for Social and Economic Research.
    19. Mark Wooden & Diana Warren, 2007. "Paid Annual Leave and Working Hours," Melbourne Institute Working Paper Series wp2007n20, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.

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