Overtime Reduction: A Successful Concept to Increase Employment? - New IZA Research Findings

Abstract

As part of the discussion about policy options to solve the German unemployment problem, there has been an ongoing debate on the redistribution of work. A potential way to achieve this redistribution is to encourage early retirement and a shorter working week through work sharing and a reduction of overtime hours. The subject of overtime reduction recently appeared on the agenda of the Bundesanstalt für Arbeit (Federal Institute of Labor) and the „Bündnis für Arbeit“ (Employment Pact) talks of the German Federal Government with the trade unions and employers´ association. The general view is that the redistribution of a given amount of work leads to more employment. This idea is based on the observation that, despite high and persistent unemployment, overtime hours have not decreased in the last few years. A new IZA study analyzes overtime work in Germany between 1984 and 1997.