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Overtime Work and Overtime Compensation in Germany

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  • Thomas Bauer
  • Klaus F. Zimmermann

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.

Suggested Citation

  • Thomas Bauer & Klaus F. Zimmermann, 1999. "Overtime Work and Overtime Compensation in Germany," Scottish Journal of Political Economy, Scottish Economic Society, vol. 46(4), pages 419-436, September.
    • Handle: RePEc:bla:scotjp:v:46:y:1999:i:4:p:419-436
    DOI: 10.1111/1467-9485.00141
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    References listed on IDEAS

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    1. David N. F. Bell & Robert A. Hart, 1999. "Unpaid Work," Economica, London School of Economics and Political Science, vol. 66(262), pages 271-290, May.
    2. Bell, David N.F. & Hart, Robert A., 1999. "Overtime Working in an Unregulated Labour Market," IZA Discussion Papers 44, Institute of Labor Economics (IZA).
    3. Veall, Michael R & Zimmermann, Klaus F, 1996. "Pseudo-R-[superscript 2] Measures for Some Common Limited Dependent Variable Models," Journal of Economic Surveys, Wiley Blackwell, vol. 10(3), pages 241-259, September.
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    More about this item

    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

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