The Decreasing Returns on Working Time: An Empirical Analysis on Panel Country Data
15 Pages Posted: 26 Jan 2011
Date Written: January 1, 2011
Abstract
An empirical analysis is conducted on two panels of 18 OECD countries to test whether the elasticity of hourly productivity to working time is negative and decreasing with working time itself. If so, the decreasing returns on working time could be indicative of a fatigue effect that increases with working time. We find that the elasticity of productivity per hour to working time is negative and decreasing with working time, but its coefficient is not strongly significant. This study offers empirical support for the hypothesis of a fatigue effect that increases with working time, but with some reservations.
Keywords: Productivity, Working time, decreasing returns
JEL Classification: J24, F01, O11, O47
Suggested Citation: Suggested Citation