More hours, more jobs? The employment effects of longer working hours
Andrews, Martyn and Gerner, Hans-Dieter and Schank, Thorsten and Upward, Richard (2014) More hours, more jobs? The employment effects of longer working hours. Oxford Economic Papers, 67 (2). pp. 245-268. ISSN 0030-7653
Official URL: http://oep.oxfordjournals.org/content/67/2/245
Increases in standard hours of work 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 may differ between firms that offer overtime and those that do not. For a panel of German plants (2001–2006) drawn from the IAB Establishment Panel, we are the first to 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 between plants that increased standard hours and those that did not. There is clear evidence of wage concession in all treated plants.
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