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Unpaid Overtime in Germany: Differences between East and West

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  • Anger, Silke

Abstract

Although the standard work week is longer in East than in West Germany, there is a higher incidence and average amount of unpaid overtime worked in the new states. We try to explain the striking differences in unpaid overtime by analyzing the labor supply side. We focus on the investment character of overtime and examine whether workers use unpaid extra hours to signal higher productivity so as to reduce the risk of losing their job. Using panel data from the SOEP and approximating the risk of unemployment with regional unemployment rates we find partial evidence for the unemployment-overtime hypothesis.

Suggested Citation

  • Anger, Silke, 2005. "Unpaid Overtime in Germany: Differences between East and West," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 125(1), pages 17-27.
    • Handle: RePEc:zbw:espost:68491
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    References listed on IDEAS

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    1. Thomas Bauer & Klaus F. Zimmermann, 1999. "Overtime Work and Overtime Compensation in Germany," Scottish Journal of Political Economy, Scottish Economic Society, vol. 46(4), pages 419-436, September.
    2. David N. F. Bell & Robert A. Hart, 1999. "Unpaid Work," Economica, London School of Economics and Political Science, vol. 66(262), pages 271-290, May.
    3. Bell, Linda A. & Freeman, Richard B., 2001. "The incentive for working hard: explaining hours worked differences in the US and Germany," Labour Economics, Elsevier, vol. 8(2), pages 181-202, May.
    4. repec:bla:scotjp:v:46:y:1999:i:4:p:419-36 is not listed on IDEAS
    5. Bell, David N.F. & Hart, Robert A. & Hübler, Olaf & Schwerdt, Wolfgang, 2000. "Paid and Unpaid Overtime Working in Germany and the UK," IZA Discussion Papers 133, Institute of Labor Economics (IZA).
    6. Booth, Alison L. & Francesconi, Marco & Frank, Jeff, 2003. "A sticky floors model of promotion, pay, and gender," European Economic Review, Elsevier, vol. 47(2), pages 295-322, April.
    7. Michael Spence, 1973. "Job Market Signaling," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 87(3), pages 355-374.
    8. Landers, Renee M & Rebitzer, James B & Taylor, Lowell J, 1996. "Rat Race Redux: Adverse Selection in the Determination of Work Hours in Law Firms," American Economic Review, American Economic Association, vol. 86(3), pages 329-348, June.
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    Citations

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    Cited by:

    1. Plum, Alexander & Knies, Gundi, 2015. "Does neighbourhood unemployment affect the springboard effect of low pay?," ISER Working Paper Series 2015-20, Institute for Social and Economic Research.
    2. Silke Anger, 2007. "The Cyclicality of Effective Wages within Employer-Employee Matches: Evidence from German Panel Data," SOEPpapers on Multidisciplinary Panel Data Research 34, DIW Berlin, The German Socio-Economic Panel (SOEP).
    3. Sjögren Lindquist, Gabriella, 2010. "Tournaments and unfair treatment," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 39(6), pages 670-682, December.
    4. Carr, Michael D., 2011. "Work hours and wage inequality: Evidence from the 2004 WERS," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 40(4), pages 417-427, August.
    5. Silke Anger, 2005. "Working Time as an Investment?: The Effects of Unpaid Overtime on Wages, Promotions, and Layoffs," Discussion Papers of DIW Berlin 535, DIW Berlin, German Institute for Economic Research.
    6. Alexander Plum & Gundi Knies, 2019. "Local unemployment changes the springboard effect of low pay: Evidence from England," PLOS ONE, Public Library of Science, vol. 14(11), pages 1-22, November.
    7. repec:hum:wpaper:sfb649dp2005-032 is not listed on IDEAS
    8. Christian Pfeifer, 2015. "Effective working hours and wages: the case of downward adjustment via paid absenteeism," Economics Bulletin, AccessEcon, vol. 35(1), pages 612-626.
    9. Mevlut Tatliyer & Nurullah Gur, 2022. "Individualism and Working Hours: Macro-Level Evidence," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 159(2), pages 733-755, January.

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    More about this item

    Keywords

    unpaid overtime; labor supply; signaling; unemployment; panel data;
    All these keywords.

    JEL classification:

    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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