Effects of Restricting Overtime Hours on the Gender Pay Gap

This paper estimates if there is a causal effect of restricting overtime hours on the gender pay gap and, if so, whether this effect varies by occupational returns to long work hours. Maximum working hours in South Korea have been limited to 52 hours per week since July 2018. This paper demonstrates a causal relationship between gender gaps in work hours and wages, using policy enforcement as a natural experiment. The empirical strategy exploits the variation in policy application time by workplace size and industry. Using the triple difference estimator, this study finds that prohibiting long work hours narrows the gender gap in overtime hours and hourly wages. The gender pay gap converges more markedly in occupations with higher returns to long hours, supporting previous studies stating that a nonlinear wage structure contributes to the widening of the gender wage gap