The Response of Wages and Actual Hours Worked to the Reduction of Standard Hours in Germany
A transformation of what had become a universal 40-hour standard working week in Germany began in 1985 with reductions negotiated in the metal-working and printing sectors. These reductions have continued through 1995, and were followed by reductions in other sectors. The union campaign aimed to increase employment through ‘work-sharing’, and is being emulated in the United States with the launch of a reduced hours campaign by the AFL-CIO. Using data from the German Socio-Economic Panel, I find that increased overtime or reduced short time was little used to offset the reduction in standard hours: a one-hour reduction in standard hours appears to have translated into a reduction in actual hours worked of between 0.85 and 1 hour for workers in manufacturing. One might expect this to have resulted in a loss of earnings for workers in affected industries. I substantiate the union’s claim of ‘full wage compensation’, however: reductions in standard hours were accompanied by a relative rise in the hourly straight-time wage of 2–3% for each hour fall in standard hours; enough to keep monthly earnings the same as in unaffected industries.
|Date of creation:||Dec 1996|
|Date of revision:|
|Contact details of provider:|| Postal: Centre for Economic Policy Research, 77 Bastwick Street, London EC1V 3PZ.|
Phone: 44 - 20 - 7183 8801
Fax: 44 - 20 - 7183 8820
|Order Information:|| Email: |
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- 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.
- 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 428-36, December.
- Earle, John S & Pencavel, John, 1990. "Hours of Work and Trade Unionism," Journal of Labor Economics, University of Chicago Press, vol. 8(1), pages S150-74, January.
- Trejo, Stephen J, 1991. "The Effects of Overtime Pay Regulation on Worker Compensation," American Economic Review, American Economic Association, vol. 81(4), pages 719-40, September.
- Nymoen, Ragnar, 1989. " Wages and the Length of the Working Day. An Empirical Test Based on Norwegian Quarterly Manufacturing Data," Scandinavian Journal of Economics, Wiley Blackwell, vol. 91(3), pages 599-612.
- 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 237-48, May.
- 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 473-86, November.
- Pencavel, John & Holmlund, Bertil, 1988. "The Determination of Wages, Employment, and Work Hours in an Economy with Centralised Wage-Setting: Sweden, 1950-83," Economic Journal, Royal Economic Society, vol. 98(393), pages 1105-26, December.
- Daniel S. Hamermesh, 1993. "Labor Demand and the Source of Adjustment Costs," NBER Working Papers 4394, National Bureau of Economic Research, Inc.
- Lehment, Harmen, 1991. "Lohnzurückhaltung, Arbeitszeitverkürzung und Beschäftigung : eine empirische Untersuchung für die Bundesrepublik Deutschland 1973 - 1990," Open Access Publications from Kiel Institute for the World Economy 1505, Kiel Institute for the World Economy (IfW).
- Franz, Wolfgang & Konig, Heinz, 1986. "The Nature and Causes of Unemployment in the Federal Republic of Germany since the 1970s: An Empirical Investigation," Economica, London School of Economics and Political Science, vol. 53(210(S)), pages S219-44, Supplemen.
- Calmfors, Lars, 1985. "Work sharing, employment and wages," European Economic Review, Elsevier, vol. 27(3), pages 293-309.
When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:1526. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.