Uncertainty over Working Schedules and Compensating Wage Differentials

Author Name MORIKAWA Masayuki (Vice President, RIETI)
Creation Date/NO. March 2018 18-J-008
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While long working hours have attracted attention from researchers and policymakers, studies on uncertainty over working schedules such as unpredictable overtime work have been scarce. This study, using originally conducted survey data, presents empirical evidence on working schedule uncertainty in Japan. According to the analysis, first, about 50% of workers have experienced unpredictable overtime work and about 30% of workers are forced occasionally to cancel scheduled holidays due to sudden work issues. The uncertainty over working schedules is prevalent among full-time regular employees and those working long hours. Second, the subjective cost of uncertain working schedules is large. The subjective cost of unpredictable overtime work is equivalent to more than 150% of predicted overtime hours. The value of certain holidays is equivalent to more than 150% of uncertain holidays. Third, the negative effect of uncertain working schedules on job satisfaction is far greater than that of an increase in total working hours or decrease in wages. Finally, although some wage premium compensation for uncertain working schedules is observed, the size of the premium is quantitatively small.

The English version of this paper is 18-E-015