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Employment effects of work sharing: an econometric analysis for West Germany

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  • Steiner, Viktor
  • Peters, Ralf-Henning
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    Abstract

    In this paper we estimate the employment effects of a reduction in weekly normal hours in West German manufacturing on the basis of an econometric models using industry panel data. We distinguish between unskilled, skilled and high-skilled workers and show that labor demand elasticities with respect to real wages differ significantly between these three skill groups. Given wages, the direct employment effect of a reduction in weekly normal hours is negligible for all three groups. However, taking the adjustment of wages into account, which compensates workers to some extent for lost income due to the reduction of working hours, the net employment effect becomes negative on average. Due to their relatively large wage elasticity, this negative effect is particularly strong for the unskilled. ?Work sharing? by means of general hours-reductions can thus not be considered an adequate policy to reduce unemployment. --

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    Paper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number 00-20.

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    Date of creation: 2000
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    Handle: RePEc:zbw:zewdip:5305

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    1. Kapteyn, Arie & Kalwij, Adriaan & Zaidi, Asghar, 2000. "The Myth of Worksharing," IZA Discussion Papers 188, Institute for the Study of Labor (IZA).
    2. Jennifer Hunt, 1998. "Hours Reductions as Work-Sharing," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 29(1), pages 339-381.
    3. Hunt, Jennifer, 1997. "Has Work Sharing Worked in Germany?," CEPR Discussion Papers, C.E.P.R. Discussion Papers 1553, C.E.P.R. Discussion Papers.
    4. Marimon, Ramon & Zilibotti, Fabrizio, 1999. "Employment and Distributional Effects of Restricting Working Time," CEPR Discussion Papers, C.E.P.R. Discussion Papers 2127, C.E.P.R. Discussion Papers.
    5. Koebel, Bertrand M. & Falk, Martin, 1999. "Curvature conditions and substitution pattern among capital, energy, materials and heterogeneous labour," ZEW Discussion Papers, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research 99-06, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    6. Calmfors, Lars & Hoel, Michael, 1988. " Work Sharing and Overtime," Scandinavian Journal of Economics, Wiley Blackwell, Wiley Blackwell, vol. 90(1), pages 45-62.
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    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Is work sharing an answer for high unemployment?
      by James Pethokoukis in AEIdeas on 2012-06-13 15:15:00
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    Cited by:
    1. Conrad, Klaus & Koschel, Henrike & Löschel, Andreas, 2005. "Not Employed 37 Hours or Employed 41? A CGE Analysis for Germany," ZEW Discussion Papers, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research 05-42, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    2. 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], Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 34(1), pages 28-44.
    3. Frank Oskamp & Dennis J. Snower, 2007. "Interactions between Employment and Training Policies," Kiel Working Papers 1389, Kiel Institute for the World Economy.

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