Scandinavian Working Papers in Economics

Working Papers in Economics,
University of Gothenburg, Department of Economics

No 55: COMPENSATING WAGE DIFFERENTIALS AND SHIFT WORK PREFERENCES. Evidence from France

Joseph Lanfranchi (), Henry Ohlsson and Ali Skalli ()
Additional contact information
Joseph Lanfranchi: ERMES, Université Panthéon-Assas, Postal: Paris II, 92 rue d’Assas, F–752 70 Paris Cedex 06, France,
Henry Ohlsson: Department of Economics, School of Economics and Commercial Law, Göteborg University, Postal: Box 640, SE 405 30 GÖTEBORG
Ali Skalli: ERMES, Université Panthéon-Assas, Postal: Paris II, 92 rue d’Assas, F–752 70 Paris Cedex 06, France

Abstract: Workers with difficult working conditions can be expected to be com-pensated by higher wages. They may, for example, choose shift work because of compensating wages but it is also possible that they prefer shift work. The previous empirical evidence is mixed. We study if there are compensating wages for shift work by estimating a switching regression model with endogenous switching using French matched employer–employee data for male full time blue collar workers. It is crucial to adjust for selectivity and not to pool data for shift and day workers. A main result is that there is a significant shift premium, the wage rate for shift workers is 16 percent higher than for day workers. A second main result is that the shift premium is significant for shift work choice. This premium compensates workers who do not self–select into shift work. A 1 percentage point increase in the premium increases the shift work probability by 0.87 percentage points.

Keywords: shift work premium; compensating wage differentials; switching regression model with endogenous switching

JEL-codes: J28; J31; J33

23 pages, September 10, 2001

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