The Causes of Hours Constraints: Evidence from Canada

Abstract

Over half of workers are dissatisfied with the number of hours they work, and of these the vast majority desire more rather than fewer hours. Using the Canadian Survey of Work Reduction, we examine two potential explanations for hours constraints - long-term contracts due to worker moral-hazard or specific-capital and implicit contracts in which wages are insured but hours fluctuate. Our results contradict the moral-hazard and insurance models and weakly support the specific-capital model. Les causes des contraintes sur les heures de travail: le cas canadien. Plus de la moitie des travailleurs ne sont pas satisfaits du nombre d'heures qu'ils travaillent et de ceux-ci la grande majorite veut travailler plus et non pas moins d'heures. A l'aide des donnees de l'Enquete canadienne sur la reduction des heures de travail, les auteurs examinent deux sources potentielles d'explication pour ce genre de phenomene: les contrats 'a long terme attribuables au probl'eme du capital humain specifique des travailleurs et au hasard moral, et les contrats implicites par lesquels le niveau de salaire horaire est assure mais le nombre d'heures travaillees fluctue. Les resultats presentes contredisent les modeles fondes sur le hasard moral et l'assurance et supportent faiblement le modele de capital humain specifique. Surveys conducted in the United States consistently show that a substantial fraction of workers wish to work a different number of hours from those that they actually work. Of those who would like to change their hours, the vast majority would prefer to work more hours (Shank 1986). In previous work (Kahn and Lang 1992), we tested whether u.s. hours constraints could be explained by lifetime contract agency models in which the earnings profile is structured so as to deter worker cheating or

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