Overtime Work and Overtime Compensation in Germany

25 Pages Posted: 16 May 2000

See all articles by Klaus F. Zimmermann

Klaus F. Zimmermann

Global Labor Organization (GLO); UNU-MERIT; Maastricht University, Department of Economics; Free University Berlin; University of Bonn; Centre for Economic Policy Research (CEPR); Journal of Population Economics

Thomas K. Bauer

Rhine-Westphalia Institute for Economic Research (RWI-Essen); University of Bochum - Faculty of Economics; IZA Institute of Labor Economics

Date Written: July 1999

Abstract

Sharing the available stock of work more fairly is a popular concern in the public policy debate. One proposal is to reduce overtime work in order to allow the employment of more people. This paper suggests that such a concept faces major problems. Using Germany as a case study, it is shown that the group of workers with the highest risks of becoming unemployed, namely the unskilled, also exhibit low levels of overtime work. Those who work overtime, namely the skilled, face excess demand on the labour market. Since skilled and unskilled workers are largely complements in production, a general reduction in overtime will lead to less production and, hence, also to a decline in the level of unskilled employment. The paper provides empirical support for this line of argument. It is also shown that paid overtime work has lost relative importance over time.

JEL Classification: J22, J23, J33

Suggested Citation

Zimmermann, Klaus F. and Bauer, Thomas K., Overtime Work and Overtime Compensation in Germany (July 1999). Available at SSRN: https://ssrn.com/abstract=171974

Klaus F. Zimmermann (Contact Author)

Global Labor Organization (GLO) ( email )

Bonn
Germany

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UNU-MERIT ( email )

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Maastricht University, Department of Economics ( email )

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University of Bonn

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Centre for Economic Policy Research (CEPR)

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Journal of Population Economics

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Thomas K. Bauer

Rhine-Westphalia Institute for Economic Research (RWI-Essen) ( email )

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Germany
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University of Bochum - Faculty of Economics ( email )

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IZA Institute of Labor Economics ( email )

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