Description: Department Seminar

Location: 368A Heady Hall

Contact Person: David Hennessy

Title: On the Distributional Effects of Regulated Overtime Standards

Abstract: Hired farm workers are among the most socially and socioeconomically disadvantaged members of the U.S. agri-food system. Solving this systemic inequity has gained public and political traction in recent years, leading to a variety of policy changes. This paper presents the first causal evidence on the viability of one such policy -- standards for overtime pay -- as a mechanism to improve farm worker well-being. The paper focuses on the short-run effects of the policies in California, the first of several states to enact new overtime standards for agricultural workers in recent years. Results suggest that employers responded to the legislation by reducing worker hours to avoid incurring the new costs associated with long working hours -- I find statistically significant increases in the proportions of workers working at or just below the new overtime thresholds, and reductions in the proportions working above the thresholds. These intensive margin adjustments are concentrated among workers who self-identify as undocumented, who have higher formal education, who are performing more skilled tasks and receiving relatively higher wages. Results suggest that employers responded to the legislation by reducing worker hours to avoid incurring the new costs associated with long working hours and this led to statistically significant and economically meaningful decreases in earnings. Workers worked, on average, 4 fewer hours and earned roughly $180 less each week.