More Hours, More Jobs? The Employment Effects of Longer Working Hours
Martyn J. Andrews (),
Hans-Dieter Gerner (),
Thorsten Schank () and
Richard Upward ()
Additional contact information Martyn J. Andrews: University of Manchester
Hans-Dieter Gerner: Institute for Employment Research (IAB), Nuremberg
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.