Are Working Time Accounts Beneficial for German Establishments?

46 Pages Posted: 26 Dec 2015

See all articles by Lutz Bellmann

Lutz Bellmann

Institute for Employment Research (IAB); Institute for the Study of Labor (IZA)

Olaf Hübler

University of Hannover; IZA Institute of Labor Economics

Abstract

This contribution investigates whether working time accounts are beneficial for the performance of German establishments. Based on the representative German Establishment Panel of the Institute for Employment Research during the period 2008-2013, effects on productivity, wages, sales, firm size, investments, further training, labor mobility, working hours, operating surplus and profits as performance indicators are estimated. Heterogeneity and robustness are investigated by a subgroup analysis where we distinguished between establishments with a high and a low share of qualified workers, between firms with strong and weak sales fluctuations. Additionally, different lengths of the agreed compensation period and reasons for longer time out periods of the employees are considered. Unobserved firm effects as well as interdependencies between important performance indicators and working time accounts are analyzed. OLS estimates, Lewbel's instrumental estimator and IV panel approaches are applied. As major results we find that productivity and investments are positively correlated with working time accounts. No significant effects of working time accounts can be detected on wages, the number of employees and operating surplus of IV panel estimates. However, on average, we find a tendency towards negative effects on profits. This result is less likely in establishments with a high share of skilled workers. Under strong sales fluctuations we find positively significant on the operating surplus. These mixed results hint to a conflict between the employers and employees interests concerning working time accounts that result in compromise solutions.

Keywords: flexible working time, working time accounts, establishments, productivity, wages, labor mobility, operating surplus, profits, share of qualified workers, sales fluctuations, compensation period

JEL Classification: C22, D21, J21, J22

Suggested Citation

Bellmann, Lutz and Hübler, Olaf, Are Working Time Accounts Beneficial for German Establishments?. IZA Discussion Paper No. 9583. Available at SSRN: https://ssrn.com/abstract=2708396

Lutz Bellmann (Contact Author)

Institute for Employment Research (IAB) ( email )

Regensburger Str. 104
Nuremberg, 90478
Germany
+49 911 179 3046 (Phone)
+49 911 179 3297 (Fax)

Institute for the Study of Labor (IZA)

P.O. Box 7240
Bonn, D-53072
Germany

Olaf Hübler

University of Hannover ( email )

Institute of Quantitative Economic Research
D-30167 Hannover
Germany
+49 511 762 4794 (Phone)
+49 511 762 3923 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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