Hours and Wages: A Bargaining Approach

Del Rey, Elena and Naval, Joaquín and Silva, José I. (2022): Hours and Wages: A Bargaining Approach.

Abstract

In a recent paper, Bick et al. (2022) show the presence of a hump-shaped relationship between hours and hourly wages with a maximum around 50 hours worked. We show that a model with fixed labor costs where workers and firms bargain in wages and hours can help explain this non-linear relationship. Also, a quantitative version of the model is able to match the empirical hourly-wage to hours worked relationship estimated by those authors for the US.

• Item Type: MPRA Paper
• Language: English
• Keywords: Fixed labor costs, wage-hours relationship, bargaining
• Subjects: J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J22 - Time Allocation and Labor Supply; J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs

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