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Has Work-Sharing Worked in Germany?

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  • Jennifer Hunt

Abstract

Starting in 1985, (West) German unions began to reduce standard hours on an industry-by-industry basis, in an attempt to raise employment. Whether this "work-sharing" works is theoretically ambiguous. I exploit the cross-industry variation in standard hours reductions to examine their impact on actual hours worked, wages, and employment. Analysis of industry-level data suggests that "work-sharing" may have reduced employment in the period 1984–1994. Using individual data from the German Socio-Economic Panel, I substantiate the union claim of "full wage compensation:" the hourly wage rose enough to offset the decline in actual hours worked.

Suggested Citation

  • Jennifer Hunt, 1999. "Has Work-Sharing Worked in Germany?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(1), pages 117-148.
    • Handle: RePEc:oup:qjecon:v:114:y:1999:i:1:p:117-148.
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    1. Wadhwani, Sushil B, 1987. "The Effects of Inflation and Real Wages on Employment," Economica, London School of Economics and Political Science, vol. 54(213), pages 21-40, February.
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    More about this item

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects

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