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Long-Term Effects of Unpaid Overtime

Author

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  • Markus Pannenberg

Abstract

Why do people work unpaid overtime? We show that remarkable long-term labor earnings gains are associated with unpaid overtime in West Germany. A descriptive analysis suggests that over a 10-year period workers with unpaid overtime experience on average at least a 10 percentage points higher increase in real labor earnings than their co-workers. Applying panel data models this result generally holds. Furthermore, we find evidence for gender specific differences with respect to the effects of cumulative average unpaid overtime work. Our results point to the importance of investment in current working hours beyond the standard work week to enhance real earnings prospects.

Suggested Citation

  • Markus Pannenberg, 2002. "Long-Term Effects of Unpaid Overtime," Discussion Papers of DIW Berlin 293, DIW Berlin, German Institute for Economic Research.
  • Handle: RePEc:diw:diwwpp:dp293
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    File URL: http://www.diw.de/documents/publikationen/73/diw_01.c.38488.de/dp293.pdf
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    References listed on IDEAS

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    1. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, January.
    2. Jennifer Hunt, 1999. "Has Work-Sharing Worked in Germany?," The Quarterly Journal of Economics, Oxford University Press, vol. 114(1), pages 117-148.
    3. Bauer, Thomas & Zimmermann, Klaus F, 1999. "Overtime Work and Overtime Compensation in Germany," Scottish Journal of Political Economy, Scottish Economic Society, vol. 46(4), pages 419-436, September.
    4. Francesconi, Marco, 2001. " Determinants and Consequences of Promotions in Britain," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 63(3), pages 279-310, July.
    5. Trejo, Stephen J, 1991. "The Effects of Overtime Pay Regulation on Worker Compensation," American Economic Review, American Economic Association, vol. 81(4), pages 719-740, September.
    6. Bell, David N F & Hart, Robert A, 1999. "Unpaid Work," Economica, London School of Economics and Political Science, vol. 66(262), pages 271-290, May.
    7. Bell, David N.F. & Hart, Robert A. & Hübler, Olaf & Schwerdt, Wolfgang, 2000. "Paid and Unpaid Overtime Working in Germany and the UK," IZA Discussion Papers 133, Institute for the Study of Labor (IZA).
    8. Bell, Linda A. & Freeman, Richard B., 2001. "The incentive for working hard: explaining hours worked differences in the US and Germany," Labour Economics, Elsevier, vol. 8(2), pages 181-202, May.
    9. Arellano, M, 1987. "Computing Robust Standard Errors for Within-Groups Estimators," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 49(4), pages 431-434, November.
    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.
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    Cited by:

    1. Hübler, Olaf, 2003. "Geschlechtsspezifische Lohnunterschiede (Gender-specific wage differentials)," Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 36(4), pages 539-559.
    2. repec:iab:iabmit:v:36:i:4:p:539-559 is not listed on IDEAS

    More about this item

    Keywords

    Overtime; Overtime Compensation; Labor Earnings; Linear Panel Data Models;

    JEL classification:

    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods

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