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Reducing Hours of Work: Does Overtime Act as a Brake Upon Employment Growth? An Analysis by Gender for the Case of Italy

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  • Giannelli, Gianna Claudia

    () (University of Florence)

  • Braschi, Cristina

    () (University of Florence)

Abstract

In recent years the question of overtime work has become increasingly relevant as part of the wider issue of the reduction in the working day. A direct relation between policies aiming at reducing working hours, and increases in overtime work neutralising their beneficial effects on employment, has been envisaged by those opposing such policies. We investigate this issue using microdata by the Bank of Italy. In Italy, the incidence of overtime work among male dependent workers is relatively high. In particular, we seek to ascertain if, for Italy too, the fear that a reduction in working hours could give rise to a substitution of overtime work for new jobs is legitimate. We estimate the probability of working overtime, together with equations for overtime hours of work, using different econometric models, both for cross-section (probit, tobit) and panel data (conditional fixed effects logit). Among several other variables, we control for wages and normal hours. We are particularly interested in exploring differences by sex. Overtime has always been studied over selected samples of male employees working in the private sector. Of course, focusing on workers who are most likely to work overtime will yield the result of a relatively large “substitution” effect. We show that extending the analysis to a more realistic labour market that includes female workers, this effect may become relatively modest for some specific policy measures. This result is robust across different sampling assumptions and model specifications, thus giving support to the hypothesis that the policies aiming at reducing the normal working day may have positive employment effects.

Suggested Citation

  • Giannelli, Gianna Claudia & Braschi, Cristina, 2002. "Reducing Hours of Work: Does Overtime Act as a Brake Upon Employment Growth? An Analysis by Gender for the Case of Italy," IZA Discussion Papers 557, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp557
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    References listed on IDEAS

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    1. Anders Frederiksen & Ebbe Krogh Graversen & Nina Smith, 2008. "Overtime work, dual job holding, and taxation," Research in Labor Economics,in: Work, Earnings and Other Aspects of the Employment Relation, volume 28, pages 25-55 Emerald Publishing Ltd.
    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. Pannenberg, Markus & Wagner, Gert G., 2001. "Why Do Overtime Work, Overtime Compensation and the Distribution of Economic Well-Being Evidence for the West Germany and Great Britain," IZA Discussion Papers 318, Institute for the Study of Labor (IZA).
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    5. Bruno Crepon & Francis Kramarz, 2002. "Employed 40 Hours or Not Employed 39: Lessons from the 1982 Mandatory Reduction of the Workweek," Journal of Political Economy, University of Chicago Press, vol. 110(6), pages 1355-1389, December.
    6. Bell, D. & RA Hart, 1999. "Overtime Working in an Unregulated Labour Market," Working Papers Series 9904, University of Stirling, Division of Economics.
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    Cited by:

    1. Ryan Michaels & Michele Battisti, 2013. "Coordinated labor Supply within the Firm: Evidence and Implications," 2013 Meeting Papers 1116, Society for Economic Dynamics.

    More about this item

    Keywords

    employment; overtime work; reducing contractual hours;

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • 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

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