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Overtime Work and Overtime Compensation in Germany

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Author Info
Bauer, Thomas () (IZA)
Zimmermann, Klaus F. () (IZA)

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Abstract

Sharing the available stock of work more fairly is a popular concern in the public policy debate. One policy proposal is to reduce overtime work in order to allow the employment of more people. This paper suggests that such a concept faces major problems. Using Germany as a case study, it is shown that the group of workers with the highest risks of becoming unemployed, namely the unskilled, also exhibit low levels of overtime work. Those who work overtime, namely the skilled, face excess demand on the labour market. Since skilled and unskilled workers are largely complements in production, a general reduction in overtime will lead to less production and hence also to a decline in the level of unskilled employment. The paper provides empirical support for this line of argument. It is also shown that paid overtime work has lost relative importance over time.

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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 48.

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Length: 25 pages
Date of creation: Jul 1999
Date of revision:
Handle: RePEc:iza:izadps:dp48

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Postal: IZA, P.O. Box 7240, D-53072 Bonn, Germany
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Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
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Related research
Keywords: Hours of work; overtime working; overtime compensation;

Other versions of this item:

Find related papers by JEL classification:
J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods

References listed on IDEAS
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.:

  1. Bell, David N. F. & Hart, Robert A., 1999. "Overtime Working in an Unregulated Labour Market," IZA Discussion Papers 44, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  2. Bell, D. & Hart, R.A., 1998. "Unpaid Work," Working Papers Series 9803, University of Stirling, Department of Economics.
    Other versions:
    • 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. [Downloadable!] (restricted)
  3. Konig, Heinz & Pohlmeier, Winfried, 1988. "Employment, Labour Utilization and Procyclical Labour Productivity," Kyklos, Blackwell Publishing, vol. 41(4), pages 551-72.
  4. Calmfors, Lars & Hoel, Michael, 1988. " Work Sharing and Overtime," Scandinavian Journal of Economics, Blackwell Publishing, vol. 90(1), pages 45-62.
  5. Hart, Robert A & Ruffell, Robin J, 1993. "The Cost of Overtime Hours in British Production Industries," Economica, London School of Economics and Political Science, vol. 60(238), pages 183-201, May. [Downloadable!] (restricted)
    Other versions:
  6. Trejo, S.J., 1992. "Overtime Pay, Overtime Houres, and Labor Unions," University of California at Santa Barbara, Economics Working Paper Series 11-92, Department of Economics, UC Santa Barbara.
    Other versions:
Full references

Cited by:
(explanations, 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.)

  1. Silke Anger, 2007. "The cyclicality of effective wages within employer-employee matches - evidence from German panel data," Working Paper Series 783, European Central Bank. [Downloadable!]
    Other versions:
  2. Yu-Fu Chen & Michael Funke, 2002. "Exchange Rate Uncertainty and Labour Market Adjustment under Fixed and Flexible Exchange Rates," Quantitative Macroeconomics Working Papers 20202, Hamburg University, Department of Economics. [Downloadable!]
    Other versions:
  3. Pannenberg, Markus & Wagner, Gert G., 2001. "Overtime Work, Overtime Compensation and the Distribution of Economic Well-Being Evidence for the West Germany and Great Britain," IZA Discussion Papers 318, Institute for the Study of Labor (IZA). [Downloadable!]
  4. Saint-Paul, Gilles, 2000. "Flexibility vs. Rigidity: Does Spain have the worst of both Worlds?," IZA Discussion Papers 144, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  5. Koch, Susanne, 2001. "Arbeitszeit und Beschäftigung im gesamtwirtschaftlichen Zusammenhang : Arbeitszeitfragen und ihre Behandlung in ökonomischen Modellen: Literaturüberblick und Forschungsperspektiven (Working time an," Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 34(1), pages 28-44. [Downloadable!]
  6. Thomas Moutos & William Scarth, 2000. "Work-Sharing: an Efficiency-Wage Analysis," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  7. Petri Böckerman, 2002. "Overtime in Finland," Finnish Economic Papers, Finnish Economic Association, vol. 15(1), pages 36-54, Spring. [Downloadable!]
  8. Silke Anger, 2005. "Working Time as an Investment? – The Effects of Unpaid Overtime on Wages, Promotions and Layoffs," SFB 649 Discussion Papers SFB649DP2005-032, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany. [Downloadable!]
    Other versions:
  9. Wolf, Elke, 2000. "Loosening hours constraints on the supply of labor : what if Germans had a Dutch labor market?," ZEW Discussion Papers 00-54, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
  10. Pannenberg, Markus, 2002. "Long-Term Effects of Unpaid Overtime: Evidence for West Germany," IZA Discussion Papers 614, Institute for the Study of Labor (IZA). [Downloadable!]
  11. Yu-Fu Chen & Michael Funke, 2004. "Working Time and Employment under Uncertainty," Quantitative Macroeconomics Working Papers 20409, Hamburg University, Department of Economics. [Downloadable!]
    Other versions:
  12. Markus Pannenberg, 2002. "Long-Term Effects of Unpaid Overtime," Discussion Papers of DIW Berlin 293, DIW Berlin, German Institute for Economic Research. [Downloadable!]
  13. Thomas Bauer & Uwe Sunde & Holger Bonin, 2004. "Dismissal Protection and Worker Flows in Small Establishments," RWI Discussion Papers 0012, Rheinisch-Westfälisches Institut für Wirtschaftsforschung. [Downloadable!]
    Other versions:
  14. Giannelli, Gianna C. & Braschi, Cristina, 2002. "Reducing Hours of Work: Does Overtime Act as a Brake Upon Employment Growth? An Analysis by Gender for the Case of Italy," IZA Discussion Papers 557, Institute for the Study of Labor (IZA). [Downloadable!]
  15. Zweimüller, Josef & Winter-Ebmer, Rudolf, 2000. "Firm-specific Training: Consequences for Job Mobility," IZA Discussion Papers 138, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  16. Mary Gregory & Adriaan S. Kalwij, 2000. "Overtime Hours in Great Britain Over the Period 1975-1999: A Panel Data Analysis," Economics Series Working Papers 027, University of Oxford, Department of Economics. [Downloadable!]
    Other versions:
  17. Gustavo Gonzaga & Naércio Aquino Menezes Filho & José Márcio Camargo Author Email: jcamargo@econ.puc-rio.br, 2002. "Os efeitos da redução da jornada de trabalho de 48 para 44 horas semanais em 1988," Textos para discussão 458, Department of Economics PUC-Rio (Brazil). [Downloadable!]
  18. Markus Pannenberg & Gert G. Wagner, 2001. "Umfang und Kompensation von Überstunden: eine vergleichende Analyse für Westdeutschland und Großbritannien," Discussion Papers of DIW Berlin 234, DIW Berlin, German Institute for Economic Research. [Downloadable!]
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