[connoredel]

I think your point #2 is right on. This article is wondering why recent observations are not behaving the "backward bending supply curve of labour" [1]. But this curve assumes a constant return on hours worked (i.e. a constant wage). If it really behaves more like overtime -- where additional hours are worth more but only if you've already worked a certain amount -- then the marginal hourly wage can rise as the marginal leisure value rises, and the equilibrium is pushed further out. In other words, it changes that curve to strictly increasing.

[1] https://en.wikipedia.org/wiki/Backward_bending_supply_curve_...