The Demand for Hours of Labor: Direct Evidence from California

California's longstanding requirement that most women receive time-and-a-half pay for workhours beyond eight in one day was extended to men in 1980. Analyzing Current Population Survey data from 1973, 1985, and 1991, we find that this overtime penalty substantially reduced the amount of daily overtime worked by California men relative to men in other states. Comparisons that use women to control for California-specific shocks show even stronger effects. The estimates imply a price elasticity of demand for overtime hours of at least -0.5. © 2000 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology