The Response of Wages and Actual Hours Worked to the Reduction of Standard Hours in Germany
AbstractA 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.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 1526.
Date of creation: Dec 1996
Date of revision:
Contact details of provider:
Postal: Centre for Economic Policy Research, 77 Bastwick Street, London EC1V 3PZ.
Phone: 44 - 20 - 7183 8801
Fax: 44 - 20 - 7183 8820
Other versions of this item:
- Jennifer Hunt, 1996. "The Response of Wages and Actual Hours Worked to the Reduction of Standard Hours in Germany," Discussion Papers of DIW Berlin 138, DIW Berlin, German Institute for Economic Research.
- 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
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Hart, R A & Sharot, T, 1978. "The Short-run Demand for Workers and Hours: A Recursive Model," Review of Economic Studies, Wiley Blackwell, vol. 45(2), pages 299-309, June.
- Nymoen, Ragnar, 1989. " Wages and the Length of the Working Day. An Empirical Test Based on Norwegian Quarterly Manufacturing Data," Scandinavian Journal of Economics, Wiley Blackwell, vol. 91(3), pages 599-612.
- Booth, Alison & Ravallion, Martin, 1993. "Employment and Length of the Working Week in a Unionized Economy in which Hours of Work Influence Productivity," The Economic Record, The Economic Society of Australia, vol. 69(207), pages 428-36, December.
- Calmfors, Lars, 1985. "Work sharing, employment and wages," European Economic Review, Elsevier, vol. 27(3), pages 293-309.
- Franz, Wolfgang & Konig, Heinz, 1986. "The Nature and Causes of Unemployment in the Federal Republic of Germany since the 1970s: An Empirical Investigation," Economica, London School of Economics and Political Science, vol. 53(210(S)), pages S219-44, Supplemen.
- Trejo, Stephen J, 1991. "The Effects of Overtime Pay Regulation on Worker Compensation," American Economic Review, American Economic Association, vol. 81(4), pages 719-40, September.
- Brunello, Giorgio, 1989. "The Employment Effects of Shorter Working Hours: An Application to Japanese Data," Economica, London School of Economics and Political Science, vol. 56(224), pages 473-86, November.
- Lehment, Harmen, 1991. "Lohnzurückhaltung, Arbeitszeitverkürzung und Beschäftigung : eine empirische Untersuchung für die Bundesrepublik Deutschland 1973 - 1990," Open Access Publications from Kiel Institute for the World Economy 1505, Kiel Institute for the World Economy (IfW).
- Earle, John S & Pencavel, John, 1990. "Hours of Work and Trade Unionism," Journal of Labor Economics, University of Chicago Press, vol. 8(1), pages S150-74, January.
- Booth, Alison & Schiantarelli, Fabio, 1987. "The Employment Effects of a Shorter Working Week," Economica, London School of Economics and Political Science, vol. 54(214), pages 237-48, May.
- Pencavel, John & Holmlund, Bertil, 1988. "The Determination of Wages, Employment, and Work Hours in an Economy with Centralised Wage-Setting: Sweden, 1950-83," Economic Journal, Royal Economic Society, vol. 98(393), pages 1105-26, December.
- Daniel S. Hamermesh, 1993. "Labor Demand and the Source of Adjustment Costs," NBER Working Papers 4394, National Bureau of Economic Research, Inc.
- Axel Börsch-Supan, 2002. "Reduction of Working Time: Does it Decrease Unemployment?," MEA discussion paper series 02003, Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy.
- Kapteyn, A. & Kalwij, A. & Zaidi, A., 2000.
"The Myth of Worksharing,"
Economics Series Working Papers
9932, University of Oxford, Department of Economics.
- Marimon, R. & Zilibotti, F., 1999.
"Employment and Distributional Effects of Restricting Working Time,"
Economics Working Papers
eco99/19, European University Institute.
- Marimon, Ramon & Zilibotti, Fabrizio, 2000. "Employment and distributional effects of restricting working time," European Economic Review, Elsevier, vol. 44(7), pages 1291-1326, June.
- Marimon, Ramon & Zilibotti, Fabrizio, 1999. "Employment and Distributional Effects of Restricting Working Time," CEPR Discussion Papers 2127, C.E.P.R. Discussion Papers.
- Victoria Osuna Padilla & José-Víctor Ríos-Rull, 2002.
"Implementing the 35 Hour Workweek by Means of Overtime Taxation,"
Economic Working Papers at Centro de Estudios Andaluces
E2002/04, Centro de Estudios Andaluces.
- Victoria Osuna & Jose-Victor Rios-Rull, 2003. "Implementing the 35 Hour Workweek by Means of Overtime Taxation," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 6(1), pages 179-206, January.
- Daniel S. Hamermesh & Stephen J. Trejo, 2000.
"The Demand for Hours of Labor: Direct Evidence from California,"
The Review of Economics and Statistics,
MIT Press, vol. 82(1), pages 38-47, February.
- Daniel S. Hamermesh & Stephen J. Trejo, 1997. "The Demand for Hours of Labor: Direct Evidence from California," NBER Working Papers 5973, National Bureau of Economic Research, Inc.
- Jennifer Hunt, 1999.
"Has Work-Sharing Worked In Germany?,"
The Quarterly Journal of Economics,
MIT Press, vol. 114(1), pages 117-148, February.
- Arie Kapteyn, 2000. "The Myth of Worksharing," Economics Series Working Papers 32, University of Oxford, Department of Economics.
- Baek, Ehung Gi & Oh, Wankeun, 2004. "The short-run production effect of the reduction of working hours," Journal of Policy Modeling, Elsevier, vol. 26(1), pages 123-144, January.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.