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Long-Term Effects of Unpaid Overtime

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  • Markus Pannenberg

Abstract

Why do people work unpaid overtime? We show that remarkable long-term labor earnings gains are associated with unpaid overtime in West Germany. A descriptive analysis suggests that over a 10-year period workers with unpaid overtime experience on average at least a 10 percentage points higher increase in real labor earnings than their co-workers. Applying panel data models this result generally holds. Furthermore, we find evidence for gender specific differences with respect to the effects of cumulative average unpaid overtime work. Our results point to the importance of investment in current working hours beyond the standard work week to enhance real earnings prospects.

Suggested Citation

  • Markus Pannenberg, 2002. "Long-Term Effects of Unpaid Overtime," Discussion Papers of DIW Berlin 293, DIW Berlin, German Institute for Economic Research.
    • Handle: RePEc:diw:diwwpp:dp293
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    References listed on IDEAS

    as
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    11. 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.
    12. 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).
    13. SOEP Group, 2001. "The German Socio-Economic Panel (GSOEP) after More than 15 Years: Overview," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 70(1), pages 7-14.
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    Citations

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    Cited by:

    1. Simon Fietze & Elke Holst & Verena Tobsch, 2011. "Germany’s Next Top Manager: Does Personality Explain the Gender Career Gap?," management revue - Socio-Economic Studies, Nomos Verlagsgesellschaft mbH & Co. KG, vol. 22(3), pages 240-273.
    2. 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.
    3. Ulrike Famira-Mühlberger & Stefan Fuchs, 2013. "Unbezahlte Überstunden in Österreich," WIFO Monatsberichte (monthly reports), WIFO, vol. 86(11), pages 897-908, November.
    4. Hübler, Olaf, 2003. "Geschlechtsspezifische Lohnunterschiede (Gender-specific wage differentials)," Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 36(4), pages 539-559.
    5. Angelina Keil & Thomas Leoni & Konrad Wolfgang Kallus & Kerstin Gaisbachgrabner, 2011. "Folgekosten langer Arbeitszeiten. Kommentierter Literaturüberblick," WIFO Studies, WIFO, number 42411.
    6. Thomas Cornelissen & John Heywood & Uwe Jirjahn, 2014. "Reciprocity and Profit Sharing: Is There an Inverse U-shaped Relationship?," Journal of Labor Research, Springer, vol. 35(2), pages 205-225, June.
    7. repec:hum:wpaper:sfb649dp2005-032 is not listed on IDEAS
    8. Hübler, Olaf, 2003. "Geschlechtsspezifische Lohnunterschiede (Gender-specific wage differentials)," Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 36(4), pages 539-559.
    9. Markus Pannenberg & Martin Spieß, 2007. "GEE Estimation of a Two-Equation Panel Data Model: An Analysis of Wage Dynamics and the Incidence of Profit-Sharing in West Germany," Discussion Papers of DIW Berlin 663, DIW Berlin, German Institute for Economic Research.
    10. Alexis Ioannides & Eleni Oxouzi & Stavros Mavroudeas, 2014. "All work and no … pay? Unpaid overtime in Greece: determining factors and theoretical explanations," Industrial Relations Journal, Wiley Blackwell, vol. 45(1), pages 39-55, January.
    11. Riffat Bhutto, 2015. "Extended Work Overtime: Labors (Employees) Choice or Obligation," South Asian Journal of Management Sciences (SAJMS), Iqra University, Iqra University, vol. 9(2), pages 63-68, Fall.
    12. Rafael Gralla & Kornelius Kraft & Stanislav Volgushev, 2017. "The effects of works councils on overtime hours," Scottish Journal of Political Economy, Scottish Economic Society, vol. 64(2), pages 143-168, May.

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    More about this item

    Keywords

    Overtime; Overtime Compensation; Labor Earnings; Linear Panel Data Models;
    All these keywords.

    JEL classification:

    • 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
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods

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