Has Work-Sharing Worked in Germany?
Starting in 1985, (West) German unions began to reduce standard hours on an industry by industry basis, in an attempt to lower unemployment. Whether work-sharing works - whether employment rises when hours per worker are reduced - is theoretically ambiguous. I test this using both individual data from the German Socio-Economic Panel and industry data to exploit the cross-section and time-series hours variation. For the 1984-1989 period I find that, in response to a one hour fall in standard hours, employment rose by 0.3-0.7%, but that total hours worked fell 2-3%, implying possible output losses. As a group workers were better off, however, as the wage bill rose. The employment growth implied by the mean standard hours decline, at most 1.1%, was not enough to bring German employment growth close to the U.S. rate. Results for the 1990-94 period were more pessimistic.
|Date of creation:||Aug 1996|
|Date of revision:|
|Publication status:||published as Quarterly Journal of Economics, Vol. 114, no. 1 (February 1999): 117-148.|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
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- Jennifer Hunt, 1996.
"The Response of Wages and Actual Hours Worked to the Reduction of Standard Hours in Germany,"
Discussion Papers of DIW Berlin
138, DIW Berlin, German Institute for Economic Research.
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