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Why Do Overtime Work, Overtime Compensation and the Distribution of Economic Well-Being Evidence for the West Germany and Great Britain

  • Pannenberg, Markus


    (Bielefeld University of Applied Sciences)

  • Wagner, Gert G.


    (DIW Berlin)

Using panel data for West Germany and Great Britain, we show that there are striking differences in overtime work and overtime compensation in the two countries in the 1990s. Our estimates reveal that the observed overtime patterns affect both the evolution of the monthly labour earnings distribution and individual economic well-being differently in West Germany and Great Britain. Besides varying labour market institutions in the two countries a higher incidence of a combination of performance-related pay and unpaid overtime in Great Britain is an important factor in explaining the observed differences. With regards to West Germany, we show that the current policy of transforming paid overtime in "working time accounts", which is conducted in the spirit of "work-sharing", is neither beneficial for employed workers in terms of income mobility, nor in terms of overall job satisfaction nor in terms of working time preferences.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 318.

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Length: 36 pages
Date of creation: Jun 2001
Date of revision:
Handle: RePEc:iza:izadps:dp318
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  1. Clark, Andrew E., 1999. "Are wages habit-forming? evidence from micro data," Journal of Economic Behavior & Organization, Elsevier, vol. 39(2), pages 179-200, June.
  2. Bell, David N.F. & Hart, Robert A., 1999. "Overtime Working in an Unregulated Labour Market," IZA Discussion Papers 44, Institute for the Study of Labor (IZA).
  3. repec:oup:qjecon:v:97:y:1982:i:4:p:543-69 is not listed on IDEAS
  4. Bauer, Thomas K. & Zimmermann, Klaus F., 1999. "Overtime Work and Overtime Compensation in Germany," IZA Discussion Papers 48, Institute for the Study of Labor (IZA).
  5. Hamermesh, Daniel S., 1999. "The Changing Distribution of Job Satisfaction," IZA Discussion Papers 42, Institute for the Study of Labor (IZA).
  6. Bell, B. & Pitt, M.K., 1995. "Trade Union Decline and the Distribution of Wages in the UK: Evidence from Kernel Density Estimation," Economics Papers 107, Economics Group, Nuffield College, University of Oxford.
  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, David N F & Hart, Robert A, 1999. "Unpaid Work," Economica, London School of Economics and Political Science, vol. 66(262), pages 271-90, May.
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