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Has Work-Sharing Worked in Germany?

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  • Jennifer Hunt

Abstract

Starting in 1985, (West) German unions began to reduce standard hours on an industry-by-industry basis, in an attempt to raise employment. Whether this "work-sharing" works is theoretically ambiguous. I exploit the cross-industry variation in standard hours reductions to examine their impact on actual hours worked, wages, and employment. Analysis of industry-level data suggests that "work-sharing" may have reduced employment in the period 1984–1994. Using individual data from the German Socio-Economic Panel, I substantiate the union claim of "full wage compensation:" the hourly wage rose enough to offset the decline in actual hours worked.

Suggested Citation

  • Jennifer Hunt, 1999. "Has Work-Sharing Worked in Germany?," The Quarterly Journal of Economics, Oxford University Press, vol. 114(1), pages 117-148.
  • Handle: RePEc:oup:qjecon:v:114:y:1999:i:1:p:117-148.
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    File URL: http://hdl.handle.net/10.1162/003355399555963
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    References listed on IDEAS

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    1. Wadhwani, Sushil B, 1987. "The Effects of Inflation and Real Wages on Employment," Economica, London School of Economics and Political Science, vol. 54(213), pages 21-40, February.
    2. 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.
    3. 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 473-486, November.
    4. Linda Bell & Richard Freeman, 1994. "Why Do Americans and Germans Work Different Hours?," NBER Working Papers 4808, National Bureau of Economic Research, Inc.
    5. G Houpis, 1993. "The Effect of Lower Hours of Work on Wages and Employment," CEP Discussion Papers dp0131, Centre for Economic Performance, LSE.
    6. R. A. Hart & T. Sharot, 1978. "The Short-run Demand for Workers and Hours: A Recursive Model," Review of Economic Studies, Oxford University Press, vol. 45(2), pages 299-309.
    7. Earle, John S & Pencavel, John, 1990. "Hours of Work and Trade Unionism," Journal of Labor Economics, University of Chicago Press, vol. 8(1), pages 150-174, January.
    8. 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 428-436, December.
    9. 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 237-248, May.
    10. Calmfors, Lars, 1985. "Work sharing, employment and wages," European Economic Review, Elsevier, vol. 27(3), pages 293-309.
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    More about this item

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects

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