Workers eventually run out of steam, and their productivity drops, when they work long hours. However, this erosion happens faster when bosses dictate the specific hours employees must work. Flextime policies, on the other hand, allow workers to choose their own schedules, aligning work hours with personal preferences. This flexibility slows the onset of fatigue, enabling workers to sustain productivity for longer periods. As a result, employers who adopt flextime policies can push workers to longer hours without the typical decline in output.
A new theoretical model presented by Jed DeVaro in a recent IZA paper highlights these dynamics, demonstrating how flextime policies shift the peak of worker productivity further to the right on an inverted-U productivity curve:
The findings are backed by data from UK establishments tracked in the 2004 and 2011 Workplace Employee Relations Survey (WERS), showing that flextime mitigates productivity losses associated with extended working hours.
Interestingly, the model also shows that increases in the minimum wage make flextime policies less appealing to employers. When the costs associated with longer hours increase, employers may revert to dictating fixed work hours, prioritizing control over flexibility. This trade-off underscores the intricate balance between economic incentives and workplace policies that support worker autonomy and productivity.