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Working Time as an Investment? – The Effects of Unpaid Overtime on Wages, Promotions and Layoffs

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  • Silke Anger

Abstract

Whereas the number of paid overtime hours declined over the last decade, a different trend can be observed for unpaid overtime work in Germany. We look at the future consequences for overtime workers, and therefore investigate the investment character of working time. We examine whether unpaid extra hours induce a higher likelihood of promotion and pay rise, and whether they reduce the risk of losing the job. Using longitudinal micro data from the GSOEP for the years 1991 to 2002 we find significant positive effects of unpaid overtime work on future payoffs, but also a positive impact on the probability of job loss. Therefore, we find only partial evidence for the investment character of unpaid overtime.

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Bibliographic Info

Paper provided by Sonderforschungsbereich 649, Humboldt University, Berlin, Germany in its series SFB 649 Discussion Papers with number SFB649DP2005-032.

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Length: 27 pages
Date of creation: Jun 2005
Date of revision:
Handle: RePEc:hum:wpaper:sfb649dp2005-032

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Keywords: overtime; unpaid work; promotion; wage growth; layoff;

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  1. Bauer, Thomas & Zimmermann, Klaus F, 1999. "Overtime Work and Overtime Compensation in Germany," Scottish Journal of Political Economy, Scottish Economic Society, vol. 46(4), pages 419-36, September.
  2. Lazear, Edward P, 1979. "Why Is There Mandatory Retirement?," Journal of Political Economy, University of Chicago Press, vol. 87(6), pages 1261-84, December.
  3. Bell, David N.F. & Hart, Robert A. & Hübler, Olaf & Schwerdt, Wolfgang, 2000. "Paid and Unpaid Overtime Working in Germany and the UK," IZA Discussion Papers 133, Institute for the Study of Labor (IZA).
  4. Bell, David N F & Hart, Robert A, 1999. "Unpaid Work," Economica, London School of Economics and Political Science, vol. 66(262), pages 271-90, May.
  5. Booth, Alison L. & Francesconi, Marco & Frank, Jeff, 2003. "A sticky floors model of promotion, pay, and gender," European Economic Review, Elsevier, vol. 47(2), pages 295-322, April.
  6. Landers, Renee M & Rebitzer, James B & Taylor, Lowell J, 1996. "Rat Race Redux: Adverse Selection in the Determination of Work Hours in Law Firms," American Economic Review, American Economic Association, vol. 86(3), pages 329-48, June.
  7. Akerlof, George A, 1984. "Gift Exchange and Efficiency-Wage Theory: Four Views," American Economic Review, American Economic Association, vol. 74(2), pages 79-83, May.
  8. Bell, Linda A. & Freeman, Richard B., 2001. "The incentive for working hard: explaining hours worked differences in the US and Germany," Labour Economics, Elsevier, vol. 8(2), pages 181-202, May.
  9. Anger, Silke, 2005. "Unpaid Overtime in Germany: Differences between East and West," EconStor Open Access Articles, ZBW - German National Library of Economics, pages 17-27.
  10. Markus Pannenberg, 2005. "Long-Term Effects Of Unpaid Overtime," Scottish Journal of Political Economy, Scottish Economic Society, vol. 52(2), pages 177-193, 05.
  11. Spence, A Michael, 1973. "Job Market Signaling," The Quarterly Journal of Economics, MIT Press, vol. 87(3), pages 355-74, August.
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Cited by:
  1. Sjögren Lindquist, Gabriella, 2010. "Tournaments and unfair treatment," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 39(6), pages 670-682, December.
  2. Silke Anger, 2008. "Overtime Work As A Signaling Device," Scottish Journal of Political Economy, Scottish Economic Society, vol. 55(2), pages 167-189, 05.

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