Little is as damaging economically, socially, and psychologically as depriving people of income and job opportunities, from unemployment and underemployment. Overemployment, however, refers to depriving the employed of desired time. Individuals are defined as overemployed when they are prepared to sacrifice income proportionally for a given reduction in their work hours but cannot do so at their current job or a suitable comparable job. For example, an overemployed individual would like to work no more than forty hours per week (including overtime), but he or she is forced by the employer to work fifty hours per week.
The conventional microeconomic model of individual labor supply assumes that workers desire to work a certain number of hours per week based on their expected wage rate, nonwage income, and preference for nonwork uses of time. Insightful models have incorporated the possibility that at least some workers are often not able to realize a preference for fewer work hours because of constraints that are imposed by employers or the labor market (Dunn 1996; Feather and Shaw 2000; Altonji and Oldham 2003). Employers face a variety of incentives and pressures that may lengthen the hours of work demanded from each employee (Rebitzer and Taylor 1995; Contensou and Vranceanu 2000). Whenever hours demanded exceed workers’ desired number of hours supplied to their job, workers supply “surplus” hours (Lee and McCann 2004). This condition may persist indefinitely when the alternative job with shorter hours actually results in relatively lower levels of utility than working surplus hours (Kaufman and Hotchkiss 2006). Hours mismatches or inconvenient hours do not create compensating wage differentials for working (Altonji and Paxson 1992; Reynolds 2004). Overemployment becomes a wider social problem to the extent that it creates symptoms of “overwork,” such as fatigue and stress, which heighten the risk of workplace accidents, illnesses, and work-family time conflict.
As with unemployment, there are cyclical, frictional, and structural macroeconomic sources of overemployment (Altman and Golden 2004). Further, measuring the overall rate of overemployment has proven tricky. The estimated rate is sensitive to the wording of survey questions and response options. Estimates range from 6 percent to over 30 percent of the U.S. workforce (Bell and Freeman 1995; Altman and Golden 2004), lower than the rate in comparable countries (Bielinski, Bosch, and Wagner 2002). Moreover, the overemployment rate may diminish with time if preferences are “endogenous.” Workers unable to “get what they want … eventually want what they get” (Schor 2005, p. 46). The distribution of overemployment is highest among women with preschool children, those in professional and technical health occupations, and those with long workweeks (Golden 2005). Overemployment may take the form of an unfulfilled wish to switch from longer to standard or part-time hours or to decline mandatory overtime work.
Conventional economists discount overemployment for two reasons. One is the suspicion that stated preferences for shorter hours would actually be acted upon. In addition, the rate of overemployment is a low priority because it is dwarfed by the rate of underemployment (Kahn and Lang 2001). However, a proactive approach would favor regulatory incentives that compel employers to shift the excess hours of the overemployed toward the underemployed within their workplace or industry.
SEE ALSO Inflation; Underemployment
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