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Loosening hours constraints on the supply of labor: what if Germans had a Dutch labor market?

  • Wolf, Elke
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    Total employment in Germany is supposed to increase if people could realize their desired working hours. However, this back-of-the-envelope calculation overestimates the effect of loosening hours constraints, because even in a very flexible labor market there will exist hours restrictions for certain jobs and occupations. Therefore, I simulate Germans' working hours in a more flexible but real world, namely the Dutch labor market. The results indicate that the average weekly working hours of German employees would indeed decrease if they had a Dutch Labor market. Thus, there exists some potential for additional work-sharing in Germany. Furthermore, the match between actual and desired hours of Germans would improve if Germans faced the same hours flexibility as Dutch employees. This holds both for men and for women. Another piece of good news is that hours restrictions shrank over time, which means, Germany seems to be moving towards a more flexible labor market.

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    Paper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number 00-54.

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    Date of creation: 2000
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    Handle: RePEc:zbw:zewdip:5338
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    1. Aaberge, R. & Colombino, U. & Strom, S., 1997. "Joint Labor Supply Decisions of Married Females and Males: An Empirical Analysis Based on Italian Household Data," Memorandum 18/1997, Oslo University, Department of Economics.
    2. Kapteyn, Arie & Kalwij, Adriaan & Zaidi, Asghar, 2004. "The myth of worksharing," Labour Economics, Elsevier, vol. 11(3), pages 293-313, June.
    3. Konig, Heinz & Pohlmeier, Winfried, 1988. "Employment, Labour Utilization and Procyclical Labour Productivity," Kyklos, Wiley Blackwell, vol. 41(4), pages 551-72.
    4. 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.
    5. Jennifer Hunt, 1996. "Has Work-Sharing Worked in Germany?," NBER Working Papers 5724, National Bureau of Economic Research, Inc.
    6. Blanchflower, David G & Oswald, Andrew J, 1990. " The Wage Curve," Scandinavian Journal of Economics, Wiley Blackwell, vol. 92(2), pages 215-35.
      • David G. Blanchflower & Andrew J. Oswald, 1995. "The Wage Curve," MIT Press Books, The MIT Press, edition 1, volume 1, number 026202375x, June.
    7. Hausman, Jerry, 2015. "Specification tests in econometrics," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 38(2), pages 112-134.
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    10. Euwals, R.W. & van Soest, A.H.O., 1996. "Desired and Actual Labour Supply of Unmarried Men and Women in the Netherlands," Discussion Paper 1996-23, Tilburg University, Center for Economic Research.
    11. Martijn P. Tummers & Isolde Woittiez, 1991. "A Simultaneous Wage and Labor Supply Model with Hours Restrictions," Journal of Human Resources, University of Wisconsin Press, vol. 26(3), pages 393-423.
    12. DiTella, Rafael & MacCulloch, Robert, 1999. "The consequences of labour market flexibility: Panel evidence based on survey data," ZEI Working Papers B 02-1999, ZEI - Center for European Integration Studies, University of Bonn.
    13. Nickell, S.J. & van Ours, J.C., 1999. "The Netherlands and the United Kingdom : A European Unemployment Miracle?," Discussion Paper 1999-119, Tilburg University, Center for Economic Research.
    14. Alessie, Rob & Kapteyn, Arie, 1991. "Habit Formation, Interdependent References and Demographic Effects in the Almost Ideal Demand System," Economic Journal, Royal Economic Society, vol. 101(406), pages 404-19, May.
    15. William T. Dickens & Shelly J. Lundberg, 1985. "Hours Restrictions and Labor Supply," NBER Working Papers 1638, National Bureau of Economic Research, Inc.
    16. Wolf, Elke, 2000. "Lower wages for less hours? A simultaneous wage-hours model for Germany," ZEW Discussion Papers 00-03, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    17. Sattinger, Michael, 1993. "Assignment Models of the Distribution of Earnings," Journal of Economic Literature, American Economic Association, vol. 31(2), pages 831-80, June.
    18. Wolf, Elke, 1998. "Do hours restrictions matter? A discrete family labor supply model with endogenous wages and hours restrictions," ZEW Discussion Papers 98-44, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    19. Ilmakunnas, Seija & Pudney, Stephen, 1990. "A model of female labour supply in the presence of hours restrictions," Journal of Public Economics, Elsevier, vol. 41(2), pages 183-210, March.
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