The paper examines how hours constraints affect the decision to change
jobs and the patterns of hours-wage tradeoffs which result from job changes.
We analyze job mobility in a labor market in which work hours on a given job
are inflexible and it is costly for workers to locate and move to alternative
jobs. Costs of mobility and imperfect information about job offers will
prevent a worker from adjusting hours by costlessly moving to jobs which offer
wage—hours combinations on the his or her labor supply schedule.
Consequently, workers will trade off wage gains for hours adjustments in
making job changes. Specifically, we show that the partial effect of a
positive change in hours by job changers who were overemployed (underemployed)
on their prior job is to increase (reduce) the size of the wage gain required
to induce a quit. The partial effect of a positive change in hours by job
changers who are overemployed (underemployed) on their new job is to increase
(reduce) the size of the wage gain associated with the quit.
We test these propositions through an empirical study of the relationship
between the wage change and interactions among the change in hours and
indicators of overemployment and underemployment on the old job and the new
job. Despite the limitation imposed by small sample sizes and lack of
information on the magnitude of hours constraints, our results are supportive
of the theory.