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More Hours, More Jobs? The Employment Effects of Longer Working Hours

Author

Listed:
  • Andrews, Martyn J.

    (University of Manchester)

  • Gerner, Hans-Dieter

    (Institute for Employment Research (IAB), Nuremberg)

  • Schank, Thorsten

    (University of Mainz)

  • Upward, Richard

    (University of Nottingham)

Abstract

Increases in standard hours have been a contentious policy issue in Germany. Whilst this might directly lead to a substitution of workers by hours, there may also be a positive employment effect due to reduced costs. Moreover, the response of firms differs between firms which offer overtime and those which do not. For a panel of German plants (2001-2006), we analyse the effect of increased standard hours on employment. Using difference-in-difference methods we find that, consistent with theory, overtime plants showed a significant positive employment response, whilst for standard-time plants there is no difference at all between plants which increased standard hours and those which did not.

Suggested Citation

  • Andrews, Martyn J. & Gerner, Hans-Dieter & Schank, Thorsten & Upward, Richard, 2012. "More Hours, More Jobs? The Employment Effects of Longer Working Hours," IZA Discussion Papers 6652, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp6652
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    References listed on IDEAS

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    1. Giancarlo Corsetti & John Flemming & Seppo Honkapohja & Willi Leibfritz & Gilles Saint-Paul & Hans-Werner Sinn & Xavier Vives, 2002. "EEAG European Economic Advisory Group at CESifo: Report on the European Economy 2002," EEAG Report on the European Economy, CESifo, vol. 0, pages 1-99, April.
    2. Booth,Alison L., 1994. "The Economics of the Trade Union," Cambridge Books, Cambridge University Press, number 9780521468398.
    3. Jennifer Hunt, 1999. "Has Work-Sharing Worked in Germany?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(1), pages 117-148.
    4. M. J. Andrews & R. Simmons, 2001. "Friday May Never be the Same Again: Some Results on Work Sharing from Union–Firm Bargaining Models," Scottish Journal of Political Economy, Scottish Economic Society, vol. 48(5), pages 488-516, November.
    5. John M. Abowd & Patrick Corbel & Francis Kramarz, 1999. "The Entry And Exit Of Workers And The Growth Of Employment: An Analysis Of French Establishments," The Review of Economics and Statistics, MIT Press, vol. 81(2), pages 170-187, May.
    6. Raposo, Pedro S. & van Ours, Jan C., 2010. "How working time reduction affects jobs and wages," Economics Letters, Elsevier, vol. 106(1), pages 61-63, January.
    7. Lars Calmfors & Giancarlo Corsetti & Seppo Honkapohja & John Kay & Willi Leibfritz & Gilles Saint-Paul & Hans-Werner Sinn & Xavier Vives, 2004. "EEAG European Economic Advisory Group at CESifo: Report on the European Economy 2004," EEAG Report on the European Economy, CESifo, vol. 0, pages 1-148, October.
    8. Mikal Skuterud, 2007. "Identifying the Potential of Work-Sharing as a Job-Creation Strategy," Journal of Labor Economics, University of Chicago Press, vol. 25(2), pages 265-287.
    9. Giancarlo Corsetti & Michael P. Devereux & Luigi Guiso & John Hassler & Gilles Saint-Paul & Hans-Werner Sinn & Jan-Egbert Sturm & Xavier Vives, 2010. "EEAG Report on the European Economy 2010," EEAG Report on the European Economy, CESifo, vol. 0, pages 1-140, February.
    10. Thorsten Schank, 2006. "Have Employees In Germany Received Full Wage Compensation After A Cut In Standard Hours?," Manchester School, University of Manchester, vol. 74(3), pages 273-293, June.
    Full references (including those not matched with items on IDEAS)

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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. More Hours, More Jobs? The Employment Effects of Longer Working Hours
      by maximorossi in NEP-LTV blog on 2012-07-06 18:46:12

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    Cited by:

    1. Ísis F. Lira & Laura de Carvalho Schiavon & Ricardo da Silva Freguglia, 2024. "Electronic monitoring of working time and labour market outcomes: Evidence from Brazil," Industrial Relations Journal, Wiley Blackwell, vol. 55(3), pages 205-221, May.
    2. Stéphane Carcillo & Alexander Hijzen & Stefan Thewissen, 2024. "The limitations of overtime limits to reduce long working hours: Evidence from the 2018 to 2021 working time reform in Korea," British Journal of Industrial Relations, London School of Economics, vol. 62(1), pages 98-126, March.
    3. Thorsten Schank, 2015. "Employment effects of longer working hours," IZA World of Labor, Institute of Labor Economics (IZA), pages 216-216, December.
    4. Martins, Pedro S., 2016. "Can Overtime Premium Flexibility Promote Employment? Firm- and Worker-Level Evidence from a Labour Law Reform," IZA Discussion Papers 10205, Institute of Labor Economics (IZA).
    5. Martins, Pedro S., 2017. "Economic effects of overtime premium flexibility: Firm- and worker-level evidence from a law reform," GLO Discussion Paper Series 102, Global Labor Organization (GLO).

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    More about this item

    Keywords

    plant-level data; employment; working time; difference-in-differences;
    All these keywords.

    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
    • J81 - Labor and Demographic Economics - - Labor Standards - - - Working Conditions

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