A transformation of what had become a universal 40-hour standard working week in Germany began in 1985 with reductions negotiated in the metal-working and printing sectors. These reductions have continued through 1995, and were followed by reductions in other sectors. The union campaign aimed to increase employment through ‘work-sharing’, and is being emulated in the United States with the launch of a reduced hours campaign by the AFL-CIO. Using data from the German Socio-Economic Panel, I find that increased overtime or reduced short time was little used to offset the reduction in standard hours: a one-hour reduction in standard hours appears to have translated into a reduction in actual hours worked of between 0.85 and 1 hour for workers in manufacturing. One might expect this to have resulted in a loss of earnings for workers in affected industries. I substantiate the union’s claim of ‘full wage compensation’, however: reductions in standard hours were accompanied by a relative rise in the hourly straight-time wage of 2–3% for each hour fall in standard hours; enough to keep monthly earnings the same as in unaffected industries.
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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number
1526.
Find related papers by JEL classification: J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
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Kapteyn, A. & Kalwij, A. & Zaidi, A., 2000.
"The myth of worksharing,"
Discussion Paper
23, Tilburg University, Center for Economic Research.
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