Option or Obligation? The Determinants of Labour Supply Preferences in Britain

Abstract

We examine persistence in work hour constraints using subjective data from the British Household Panel Survey, and investigate the role of job and employer changes in alleviating these constraints. Evidence suggests that 40 per cent of employees prefer to work a different number of hours at their current wage, and the majority of these prefer to work fewer hours. Our estimates also indicate that, although these constraints persist over time, job and employer changes alleviate over-employment particularly among men. Work time preferences are determined by observed job and employer related characteristics, individual demographics, local labour demand and time-invariant unobserved individual-specific effects.