Has Work Sharing Worked in Germany?

Jennifer Hunt

No 1553, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Starting in 1985, (West) German unions began to reduce standard hours on an industry-by-industry basis in an attempt to lower unemployment. Whether ‘work-sharing’ works – whether employment rises when hours per worker are reduced – is theoretically ambiguous. I test this using both individual data from the German Socio-Economic Panel and industry data to exploit the cross-section and time-series hours variation. For the 1984–9 period, I find that, in response to a one-hour fall in standard hours, employment rose by 0.3–0.7%, but that total hours worked fell by 2–3%, implying possible output losses. As a group, however, workers were better off as the wage bill rose. The employment growth implied by the mean standard hours decline, at most 1.1%, was not enough to bring German employment growth close to the US rate. Results for the 1990–94 period were more pessimistic.

Keywords: Employment; Germany; Hours; Unions; Work-sharing (search for similar items in EconPapers)
JEL-codes: J23 J51 (search for similar items in EconPapers)
Date: 1997-01
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Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Has Work-Sharing Worked in Germany? (1999)
Working Paper: Has Work-Sharing Worked in Germany? (1996)
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