Work Hours and Amenity Trade-Offs

We present a compensating wage differentials model that incorporates complementarity and substitutability in firms' provision of amenities and workers' preferences for them. These interactions help explain why some amenities tend to be bundled, while others are more often traded off. Our empirical analysis examines amenity substitution in the US labor market using data from the National Longitudinal Survey of Youth 1997 cohort. We highlight how shorter or more flexible total work hours are traded off with other workplace amenities. Our findings suggest that women may need to forgo amenities they value to secure shorter, more flexible work hours.