Document Type

Discussion Paper

Publication Date

5-5-2025

CFDP Number

2268R1

CFDP Pages

20

Journal of Economic Literature (JEL) Code(s)

D13, J22, D86, M54.

Abstract

I propose a model in which workers experience fatigue over time and can restore productivity by taking breaks. Optimal schedules feature evenly spaced, full-recovery breaks; when breaks are costless, they should occur frequently, but switching costs make the optimal number finite. The model is embedded in a principal-agent framework with contractual frictions. When employers control the schedule, workers overwork; when workers self-manage, they overrest. Both lead to inefficiencies. These results shed light on the trade-offs in remote work arrangements, especially following COVID-19. The analysis highlights how control rights, incentive design, and recovery constraints interact—and why neither rigid supervision nor full autonomy guarantees efficiency.

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