6533b85dfe1ef96bd12bdfc3

RESEARCH PRODUCT

More hours, more jobs? The employment effects of longer working hours

Richard UpwardHans-dieter GernerThorsten SchankMartyn Andrews

subject

Working hoursEconomics and EconometricsLabour economicsmedia_common.quotation_subjectWageworking hours wage concession overtime paymentsjel:C23Overtimefood and beveragesjel:J81Working timeDifference in differencesjel:J23Economicsplant-level data employment working time difference-in-differencesmedia_common

description

Increases in standard hours of work have been a contentious policy issue in Germany. Whilst this might directly lead to a substitution of workers by hours, there may also be a positive employment effect due to reduced costs. Moreover, the response of firms may differ between firms that offer overtime and those that do not. For a panel of German plants (2001–2006) drawn from the IAB Establishment Panel, we are the first to analyse the effect of increased standard hours on employment. Using difference-in-difference methods we find that, consistent with theory, overtime plants showed a significant positive employment response, whilst for standard-time plants there is no difference between plants that increased standard hours and those that did not. There is clear evidence of wage concession in all treated plants.

yearjournalcountryeditionlanguage
2014-09-16