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Overtime Work as a Signaling Device

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  • Anger, Silke

Abstract

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.

Suggested Citation

  • Anger, Silke, 2008. "Overtime Work as a Signaling Device," EconStor Open Access Articles, ZBW - German National Library of Economics, pages 167-189.
  • Handle: RePEc:zbw:espost:68492
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    References listed on IDEAS

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    1. 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.
    2. 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.
    3. Engellandt, Axel & Riphahn, Regina T., 2005. "Temporary contracts and employee effort," Labour Economics, Elsevier, vol. 12(3), pages 281-299, June.
    4. Jennifer Hunt, 1999. "Has Work-Sharing Worked in Germany?," The Quarterly Journal of Economics, Oxford University Press, vol. 114(1), pages 117-148.
    5. Anger, Silke, 2005. "Unpaid Overtime in Germany: Differences between East and West," EconStor Open Access Articles, ZBW - German National Library of Economics, pages 17-27.
    6. John H. Tyler & Richard J. Murnane & John B. Willett, 2000. "Estimating the Labor Market Signaling Value of the GED," The Quarterly Journal of Economics, Oxford University Press, vol. 115(2), pages 431-468.
    7. Massimiliano Bratti & Stefano Staffolani, 2007. "Effort-based career opportunities and working time," International Journal of Manpower, Emerald Group Publishing, vol. 28(6), pages 489-512, September.
    8. David Campbell & Francis Green, 2002. "The Long Term Pay-Off From Working Longer Hours," Studies in Economics 0205, School of Economics, University of Kent.
    9. 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.
    10. 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.
    11. 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).
    12. Michael Spence, 1973. "Job Market Signaling," The Quarterly Journal of Economics, Oxford University Press, vol. 87(3), pages 355-374.
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    Citations

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    Cited by:

    1. Gustavsson, Magnus, 2013. "Permanent versus transitory wage differentials and the inequality-hours hypothesis," Economics Letters, Elsevier, vol. 121(3), pages 537-541.
    2. Zapf, Ines, 2015. "Individual and workplace-specific determinants of paid and unpaid overtime work in Germany," IAB Discussion Paper 201515, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    3. Carr, Michael D., 2011. "Work hours and wage inequality: Evidence from the 2004 WERS," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 40(4), pages 417-427, August.
    4. Bossler, Mario & Grunau, Philipp, 2016. "Asymmetric information in external versus internal promotions," IAB Discussion Paper 201611, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    5. Thomas Cornelissen & John Heywood & Uwe Jirjahn, 2014. "Reciprocity and Profit Sharing: Is There an Inverse U-shaped Relationship?," Journal of Labor Research, Springer, vol. 35(2), pages 205-225, June.
    6. Frei, Irina & Grund, Christian, 2017. "Antecedents of Overtime Work: The Case of Junior Academics," IZA Discussion Papers 11065, Institute for the Study of Labor (IZA).
    7. Christian Pfeifer, 2015. "Effective working hours and wages: the case of downward adjustment via paid absenteeism," Economics Bulletin, AccessEcon, vol. 35(1), pages 612-626.
    8. Elisabetta Magnani, 2012. "Older Workers' Training Opportunities in Times of Workplace Innovation," Working Papers 201205, ARC Centre of Excellence in Population Ageing Research (CEPAR), Australian School of Business, University of New South Wales.
    9. Alexis Ioannides & Eleni Oxouzi & Stavros Mavroudeas, 2014. "All work and no … pay? Unpaid overtime in Greece: determining factors and theoretical explanations," Industrial Relations Journal, Wiley Blackwell, vol. 45(1), pages 39-55, January.
    10. Daniel Possenriede & Wolter Hassink & Janneke Plantenga, 2014. "Does face-time affect your career?," Working Papers 14-10, Utrecht School of Economics.
    11. Zapf, Ines & Weber, Enzo, 2017. "The role of employer, job and employee characteristics for flexible working time : An empirical analysis of overtime work and flexible working hours' arrangements," IAB Discussion Paper 201704, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    12. Ines Zapf, 2015. "Individual and Workplace-Specific Determinants of Paid and Unpaid Overtime Work in Germany," SOEPpapers on Multidisciplinary Panel Data Research 771, DIW Berlin, The German Socio-Economic Panel (SOEP).
    13. repec:bla:scotjp:v:64:y:2017:i:2:p:143-168 is not listed on IDEAS
    14. Jorge González Chapela, 2015. "Split or straight? Evidence of the effects of work schedules on workers’ well-being, time use, and productivity," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 6(2), pages 153-177, June.
    15. Natalia Montinari, 2010. "Reciprocity in Teams: a Behavioral Explanation for Unpaid Overtime," "Marco Fanno" Working Papers 0114, Dipartimento di Scienze Economiche "Marco Fanno".

    More about this item

    Keywords

    Unpaid Overtime; Internal Signaling; Asymmetric Information;

    JEL classification:

    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts

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