Non-wage labour costs and employment: a note on some Canadian evidence from the 1970s

Abstract

This note considers the relationship between quasi-fixed labour costs (paid absences, employee pension plans, etc.) and overtime hours worked. Specifically, it reports the results of testing the hypothesis that, the larger the ratio of quasi-fixed costs to overtime wage rates, the greater the incentive for employers to schedule overtime hours for the current work force and pay overtime rates rather than expand the work force and pay standard rates. The results fail to reject the hypothesis.