How relative income affects work hours preferences

Abstract

ABSTRACTIn this article, we look at explanations for why people want to change their working hours. We focus on the role of income and differentiate between the effect of household income, personal income and self-perceived relative income. Using Flemish data on 1435 workers, we perform binary logistic regressions in which we compare those who are over- or underemployed with those who are currently working their preferred number of hours. Our results show that the desire to work fewer hours is mostly related to a bad work–life balance, while the wish to increase working hours is associated with relative income rather than absolute income. Based on our findings we recommend governments to not only focus on increasing flexibility at the individual level but to also consider these positional effects by taking measures (e.g. decreasing the duration of the standard working week) at the population level.