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The Effect of a Reduction in Working Hours on Employment: Empirical Evidence for West-Germany

Author

Listed:
  • Christian Dreger

    (Institute for Economic Research Halle, Germany)

  • Olaf Fuchs

    (Institute for Economic Research Halle)

  • Jurgen Kolb

    (Federal Ministry of Labour and Social Affairs, Germany)

Abstract

This paper deals with the effect of a reduction of weekly working time on employment. Often working time reduction is proposed to stimulate employment. We investigate this hypothesis for West German industrial branches using annual data from 1960 to 1995. The analysis is carried out by the means of panel econometric methods. The results suggest that a reduction of a weekly working time has no impact on the level of employment. Moreover, we identify a rise in the firm's demand for overtime hours as one reason for this outcome.

Suggested Citation

  • Christian Dreger & Olaf Fuchs & Jurgen Kolb, 2001. "The Effect of a Reduction in Working Hours on Employment: Empirical Evidence for West-Germany," Journal of Economic Insight, Missouri Valley Economic Association, vol. 27(2), pages 69-81.
    • Handle: RePEc:mve:journl:v:27:y:2001:i:2:p:69-81
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    More about this item

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand

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