Hours and wages: A bargaining approach

Del Rey, E., Naval, J., & Silva, J. I. (2022). Hours and wages: A bargaining approach. Economics Letters, 110652.



In a recent paper, Bick et al. (2022) show the presence of a hump-shaped relationship between hours and hourly wages with a maximum around 50 h worked. We show that a model with fixed labor costs where workers and firms bargain in wages and hours can help explain this non-linear relationship. Also, a quantitative version of the model is able to match the empirical hourly-wage to hours worked relationship estimated by those authors for the US.

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