The decline of paid overtime working in Britain

ABSTRACT

The share of paid‐for overtime hours within total paid‐for hours worked in Britain has declined from 5.4% to 2.0% between 1997 and 2020. We investigate this decline, focussing on its distribution across full‐time (f/t) and part‐time males and females and across 19 one‐digit industries. It is established that f/t males are dominant in the decline both of overtime working and overtime hours. We explore the implications of the decline on the share of overtime pay within total pay as well as on the gender pay gap. We test for economic, structural and cyclical influences on overtime working via a two‐part regression model that allows us to differentiate between the incidence of overtime working and weekly overtime hours of overtime employees. We examine how paid‐for overtime has varied with collective bargaining coverage, low pay, the 2008 financial crisis, the arrival of Covid‐19, job mobility and the public/private sector dichotomy. Combined marginal effects of changes in the incidence of overtime working and weekly overtime hours are also provided. The influence of the decline of collective bargaining in the last two decades on overtime working is highlighted using Blinder–Oaxaca decompositions.