How working time changes affect wages and employment

Abstract

"This paper offers a synthesis of models of firm-union bargaining over wages and hours of work and considers how wages and employment respond to variations in normal hours of work. Our review uncovers several problems which must be addressed if the demand-side theory of hours of work is to be reconciled with empirical evidence. Chief amongst these is the clear empirical finding that actual hours and normal weekly hours co-vary positively with an elasticity close to unity. We show how a variety of firm-union bargaining models can inform assessment of wage and employment responses to cuts in the normal working week and, in passing, show consistency of these models with some stylised facts. We also consider the potential for establishment panel data sets, such as the IAB panel, to estimate models of demand for hours and employment where firm-union barganing is important." (Author's abstract, IAB-Doku) ((en))

Cite article

Simmons, R. (2001): How working time changes affect wages and employment. In: L. Bellmann, K. Gerlach, O. Hübler & W. Meyer (Hrsg.) (2001): Beschäftigungseffekte betrieblicher Arbeitszeitgestaltung (Beiträge zur Arbeitsmarkt- und Berufsforschung, 251), p. 1-31.