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Overtime Work and Overtime Compensation in Germany

Author

Listed:
  • Bauer, Thomas K.

    (RWI)

  • Zimmermann, Klaus F.

    (University of Bonn)

Abstract

Sharing the available stock of work more fairly is a popular concern in the public policy debate. One policy proposal is to reduce overtime work in order to allow the employment of more people. This paper suggests that such a concept faces major problems. Using Germany as a case study, it is shown that the group of workers with the highest risks of becoming unemployed, namely the unskilled, also exhibit low levels of overtime work. Those who work overtime, namely the skilled, face excess demand on the labour market. Since skilled and unskilled workers are largely complements in production, a general reduction in overtime will lead to less production and hence also to a decline in the level of unskilled employment. The paper provides empirical support for this line of argument. It is also shown that paid overtime work has lost relative importance over time.

Suggested Citation

  • Bauer, Thomas K. & Zimmermann, Klaus F., 1999. "Overtime Work and Overtime Compensation in Germany," IZA Discussion Papers 48, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp48
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    References listed on IDEAS

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    1. Hart, Robert A & Ruffell, Robin J, 1993. "The Cost of Overtime Hours in British Production Industries," Economica, London School of Economics and Political Science, vol. 60(238), pages 183-201, May.
    2. Bell, D. & Hart, R.A., 1998. "Unpaid Work," Working Papers Series 9803, University of Stirling, Division of Economics.
    3. Konig, Heinz & Pohlmeier, Winfried, 1988. "Employment, Labour Utilization and Procyclical Labour Productivity," Kyklos, Wiley Blackwell, vol. 41(4), pages 551-572.
    4. Calmfors, Lars & Hoel, Michael, 1988. " Work Sharing and Overtime," Scandinavian Journal of Economics, Wiley Blackwell, vol. 90(1), pages 45-62.
    5. Veall, Michael R & Zimmermann, Klaus F, 1996. "Pseudo-R-[superscript 2] Measures for Some Common Limited Dependent Variable Models," Journal of Economic Surveys, Wiley Blackwell, vol. 10(3), pages 241-259, September.
    6. Bell, D. & RA Hart, 1999. "Overtime Working in an Unregulated Labour Market," Working Papers Series 9904, University of Stirling, Division of Economics.
    7. Trejo, Stephen J, 1993. "Overtime Pay, Overtime Hours, and Labor Unions," Journal of Labor Economics, University of Chicago Press, vol. 11(2), pages 253-278, April.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    overtime working; Hours of work; overtime compensation;
    All these keywords.

    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
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods

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