The Causes of Hours Constraints: Evidence from Canada

Over half of workers are dissatisfied with the number of hour they work and of these the vast majority desire more rather than fewer hours. Using the Canadian Survey of Work Reduction, the authors examine two potential explanations for hours constraints--long-term contracts due to worker moral-hazard or specific-capital and implicit contracts in which wages are insured but hours fluctuate. The authors' results contradict the moral-hazard and insurance models and weakly support the specific-capital model.