Work Hours, Wages, and Vacation Leave

Abstract

Using the Panel Study of Income Dynamics and the Health and Retirement Study, we provide a set of facts about vacation leave and its relationship to hours worked, hours constraints, wage rates, worker characteristics, spouse's vacation leave, labor market experience, job tenure, occupation, industry, and labor market conditions. We show that on average vacation time taken rises 1 to 1 with paid vacation but varies around it, that annual hours worked fall by about 1 full time week with every week of paid vacation, that the gap between time taken and time paid for is higher for women, union members, and government workers, that hourly wage rates have a strong positive relationship with paid vacation weeks both in the cross section and across jobs, and that nonwage compensation is positively related to vacation weeks. We provide evidence that vacation leave is determined by broad employer policy rather than by negotiation between the worker and firm. In particular, it is strongly related to job seniority but depends very little on labor market experience, and for job changers it is only weakly related to the amount of vacation on the previous job.

What Determines Vacation Leave? The Role of Gender

“…Using a linked employee‐employer dataset, the Canadian Workplace and Employee Survey (WES), we investigate the extent to which worker, job and workplace characteristics explain the days of paid vacation offered, vacation used, and vacation unused. This paper adds to the growing empirical literature on vacation leave (Maume, ; Altonji and Usui, ; Fakih, ; Goerke et al ., ) by focusing on the role of gender in understanding the determinants of vacation time in Canada. This is important because the relative weight workers allocate for leisure time might differ across gender leading to different use of vacation time between men and women.…”

“…More recently, Fakih () uses Statistics Canada's WES dataset to examine the relationships between hours worked, wages, and paid vacation. Using a similar methodology to Altonji and Usui's () paper based on OLS model and a pooled sample of men and women, however, controlling for detailed observed worker and workplace characteristics, he finds that both men and women receive the same amount of vacation days. The findings also show that human capital, work arrangements, and firm size are important determinants for paid vacation earned.…”

“…In a more detailed study, Altonji and Usui () use the Panel Study of Income Dynamics (PSID) from 1975 to 1991 and find that women take around one more week of vacation than men, while men and women receive the same amount of paid vacation in the United States. They note that gender differences in unused vacation days can be related to the high concentration of women in education and related fields leading them to use more of their vacation days.…”

Are Japanese Men of Pensionable Age Underemployed or Overemployed?

“…To capture a job's hours constraints, we construct the binary variables of overemployment and underemployment based on the JSTAR and HRS responses, following Paxson (1988, 1992), Altonji and Usui (2007), and Usui (2009Usui ( , 2015. Specifically, we allocate one to the overemployment variable if the respondent answered "No" to "(Not counting overtime hours,) could you reduce the number of paid hours in your regular work schedule?"…”

Work now, pay later? An empirical analysis of the pension–pay trade off

“…The theory of compensating wage differentials has been tested, with mixed results, on a variety of such benefits: health insurance [Olson (2002), Currie and Madrian (1999)]; maternity benefits [Gruber (1994)]; work-related injury and sickness insurance [Gruber and Krueger (1991)]; paid vacation leave [Altonji and Usui (2007)]. In contrast, relatively little empirical work has been undertaken on the compensating differential between wages and pensions, particularly on UK data.…”