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Overtime Work as a Signaling Device

  • Anger, Silke

This paper provides an explanation for the empirically proven relationship between overtime and future benefits. We suggest an internal signaling model, in which a worker signals his value to the employer by supplying unpaid overtime. In our empirical analysis, we examine whether overtime has in fact a signaling component. Variations in collectively bargained hours between industries are exploited, as they imply different overtime thresholds for workers with the same number of actual hours. Using data from the German Socio-Economic Panel Study for the years 1993–2004, a positive signaling value of unpaid overtime is found for West German workers.

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File URL: http://econstor.eu/bitstream/10419/68492/1/Anger_2008_Overtime-Work-Signaling.pdf
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Article provided by ZBW - German National Library of Economics in its journal EconStor Open Access Articles.

Volume (Year): (2008-05)
Issue (Month): ()
Pages: 167-189

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Handle: RePEc:zbw:espost:68492
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  1. Massimiliano BRATTI & Stefano STAFFOLANI, 2004. "Effort-Based Career Opportunities and Working Time," Working Papers 203, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
  2. 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.
  3. Engellandt, Axel & Riphahn, Regina T., 2003. "Temporary Contracts and Employee Effort," IZA Discussion Papers 780, Institute for the Study of Labor (IZA).
  4. Jennifer Hunt, 1996. "Has Work-Sharing Worked in Germany?," NBER Working Papers 5724, National Bureau of Economic Research, Inc.
  5. David Campbell & Francis Green, 2002. "The Long Term Pay-Off From Working Longer Hours," Studies in Economics 0205, School of Economics, University of Kent.
  6. Spence, A Michael, 1973. "Job Market Signaling," The Quarterly Journal of Economics, MIT Press, vol. 87(3), pages 355-74, August.
  7. Silke Anger, 2005. "Working Time as an Investment?: The Effects of Unpaid Overtime on Wages, Promotions, and Layoffs," Discussion Papers of DIW Berlin 535, DIW Berlin, German Institute for Economic Research.
  8. Anger, Silke, 2003. "Unpaid overtime in Germany : differences between East and West," SFB 373 Discussion Papers 2003,42, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
  9. John H. Tyler & Richard J. Murnane & John B. Willett, 2000. "Estimating The Labor Market Signaling Value Of The GED," The Quarterly Journal of Economics, MIT Press, vol. 115(2), pages 431-468, May.
  10. Bell, David N.F. & Hart, Robert A., 2003. "How Important Is Guaranteed or Institutionalised Overtime?," IZA Discussion Papers 766, Institute for the Study of Labor (IZA).
  11. Meyer, Anna & Wallette, Mårten, 2005. "Absence of Absenteeism and Overtime work – Signaling Factors for Temporary Workers?," Working Papers 2005:15, Lund University, Department of Economics.
  12. Sousa-Poza, Alfonso & Ziegler, Alexandre, 2003. "Asymmetric information about workers' productivity as a cause for inefficient long working hours," Labour Economics, Elsevier, vol. 10(6), pages 727-747, December.
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