Basing our empirical work on the British New Earnings Survey Panel Data between 1990 and
1996, we show that overtime hours of male workers contain significant individual effects. We
also show that using suitable techniques to deal with the lagged overtime variable serves to
alter radically the estimated speed of adjustment of overtime to its desired level. Our results
are consistent with firms either guaranteeing the length of weekly overtime or following
institutionalised custom and practice in their overtime arrangements. They are far less
supportive of traditional demand-side analyses of overtime working.
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