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Overtime Work and Overtime Compensation in Germany

  • Bauer, Thomas K.



  • Zimmermann, Klaus F.


    (IZA and University of Bonn)

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.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 48.

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Length: 26 pages
Date of creation: Jul 1999
Date of revision:
Publication status: published in: Scottish Journal of Political Economy, 1999, 46 (4), 419-436; see IZA Reprints 19/99
Handle: RePEc:iza:izadps:dp48
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  1. Robert A Hart & Robin J Ruffell, 1992. "The Cost of Overtime Hours in British Production Industries," Working Papers Series 92/1, University of Stirling, Division of Economics.
  2. Calmfors, Lars & Hoel, Michael, 1988. " Work Sharing and Overtime," Scandinavian Journal of Economics, Wiley Blackwell, vol. 90(1), pages 45-62.
  3. Konig, Heinz & Pohlmeier, Winfried, 1988. "Employment, Labour Utilization and Procyclical Labour Productivity," Kyklos, Wiley Blackwell, vol. 41(4), pages 551-72.
  4. Trejo, Stephen J, 1993. "Overtime Pay, Overtime Hours, and Labor Unions," Journal of Labor Economics, University of Chicago Press, vol. 11(2), pages 253-78, April.
  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 241-59, September.
  6. 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).
  7. Bell, D. & Hart, R.A., 1998. "Unpaid Work," Working Papers Series 9803, University of Stirling, Division of Economics.
    • 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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