Has Work Sharing Worked in Germany?
Starting in 1985, (West) German unions began to reduce standard hours on an industry-by-industry basis in an attempt to lower unemployment. Whether ‘work-sharing’ works – whether employment rises when hours per worker are reduced – is theoretically ambiguous. I test this using both individual data from the German Socio-Economic Panel and industry data to exploit the cross-section and time-series hours variation. For the 1984–9 period, I find that, in response to a one-hour fall in standard hours, employment rose by 0.3–0.7%, but that total hours worked fell by 2–3%, implying possible output losses. As a group, however, workers were better off as the wage bill rose. The employment growth implied by the mean standard hours decline, at most 1.1%, was not enough to bring German employment growth close to the US rate. Results for the 1990–94 period were more pessimistic.
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- 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.
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- Hunt, Jennifer, 1996.
"The Response of Wages and Actual Hours Worked to the Reduction of Standard Hours in Germany,"
CEPR Discussion Papers
1526, C.E.P.R. Discussion Papers.
- 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.
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- Linda Bell & Richard Freeman, 1994. "Why Do Americans and Germans Work Different Hours?," NBER Working Papers 4808, National Bureau of Economic Research, Inc.
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