Table of Contents
Economics Research International
Volume 2014 (2014), Article ID 632506, 15 pages
Research Article

Working the Night Shift: The Impact of Compensating Wages and Local Economic Conditions on Shift Choice

1Department of Business Administration, McAfee School of Business Administration, Union University, 1050 Union University Drive, Jackson, TN 38305, USA
2Department of Economics, University of Mississippi, 342 Holman Hall, University, MS 38677, USA

Received 26 July 2014; Accepted 24 September 2014; Published 9 October 2014

Academic Editor: Arjun S. Bedi

Copyright © 2014 Colene Trent and Walter J. Mayer. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.


The theory of compensating differentials asserts that night shift workers should receive compensating wage differentials due to undesirable work conditions. In weak local economies, workers may have difficulty finding jobs; thus, these workers might be more likely to accept night shift work and be less concerned with the size of the compensating differential for night shifts. Using CPS data from 2001, this paper employs maximum likelihood estimation of an endogenous switching regression model to analyze wages of day and night shift workers and shift choice. The findings indicate the presence of selection bias, thus emphasizing the importance of correcting for self-selection into night shifts. The average of the estimated wage differentials for night shift work is negative for the overall sample, with differentials varying by worker characteristics. The shift differential is found to be a statistically significant predictor of shift choice, indicating that shift premiums play an important role in motivating individuals to select night shift work. Using two measures of local economic conditions and a new method of analyzing interaction effects in the context of an endogenous switching regression model, this paper finds limited evidence that weak local economic conditions lessen the impact of compensating differentials on shift choice.