Actual and preferred working hours

We use British panel data to investigate whether or not subjective data on desired labour supply provide information on future labour market behaviour. We find that, although men and women are able to adjust their work hours in line with preferences, this is greatly facilitated through within- and between-employer job changes. We also find that hours constraints are significant determinants of leaving the labour market and within- and between-employer mobility. We conclude that rigidities in the labour market exist and that these rigidities impair the welfare of employees.