Do hours restrictions matter? A discrete family labor supply model with endogenous wages and hours restrictions

The labor supply of West German married and cohabiting couples is analyzed using a discrete choice model. Following van Soest (1995), the labor supply decision is based on a household utility function which is determined by the leisure of the two spouses and net household income. Furthermore, heterogeneity of preferences and the German tax and benefit system are taken into account. We extend the neoclassical labor supply model in two directions. First, we allow for endogenous wages and find that there exist substantial wage differences between part-time and full-time jobs. In view of the negative wage differentials of part-time jobs, the model with endogenous wages predicts lower part-time employment than the standard neoclassical model. Compared with the distribution of actual hours worked, the share of part-time jobs is highly underpredicted. In a second step, hours restrictions are accommodated, as a result of which the estimated wage elasticities of both spouses are substantially reduced. --

Lower wages for less hours? A simultaneous wage-hours model for Germany

In this paper the impact of working hours on the gross hourly wage rate of West German women is analyzed. We use a simultaneous wage-hours model which takes into account the participation decision. First, our estimates show that the hourly wage rate is strongly a¤ected by the working hours. In order to avoid any assumptions about the functional form, we estimate linear spline functions. Second, we detect di¤erent wage-hours profiles for specific groups of individuals. Despite these di¤erences, the wage reduction for jobs with less than 20 hours a week and for overtime hours turns out to be a robust result. However, the hourly wage rate of jobs with 20 to 38 hours does not di¤er significantly. Third, for West German women, the exogeneity assumption of working hours in the wage regression must be rejected if the wage-hours locus is assumed to be the same for all individuals. As a result of this the wage rate of full-time employees is overestimated in the standrad OLS estimation. --

Wage Penalties for Career Interruptions: An Empirical Analysis for West Germany

This paper examines the wage effects of different types of career interruptions. We consider the timing and duration of non-employment spells by exploiting an administrative data set of German social security accounts (IAB employment sample) supplemented with information on the employees? entire working lives (IAB supplement sample I). These data allow us to distinguish between employment breaks due to registered unemployment, formal parental leave, training or other reasons – a distinction which can only be approximated using just the IAB employment sample. Our IV fixed effects estimation results suggest that women?s labor supply is endogenously determined, whereas men?s employment histories can be treated as exogenous. Career interruptions reduce the wage rates of both men and women. Moreover, the wage cuts resulting from unemployment, parental leave and additional home time are larger than the pure human capital effects of missing experience, hinting at a possible stigmatization of workers with discontinuous employment histories. --career interruptions,returns to experience,wage differentials,panel estimation

Does Work Time Flexibility Work? An Empirical Assessment of the Efficiency Effects for German Firms

In this paper we assess the impact of flexible work time schedules on firm efficiency using representative establishment data for Germany. Following the approach by Battese and Coelli (1995), we estimate a stochastic production frontier and the determinants of technical efficiency simultaneously. The innovation of our study is that we draw on technical efficiency instead of productivity to appraise the success of flexible working hours. The results indicate that while the use of work time schedules with moderate flexibility is positively related to technical efficiency, highly flexible work time arrangements seem to be negatively correlated with an efficient organization of the work flow. However, these efficiency losses should not be interpreted as causal effects, because highly flexible work time schedules are most likely to be introduced in struggling firms. --Stochastic production frontier,flexible work hours,efficiency

Reassessing the Impact of High Performance Workplaces

High performance workplace practices were extolled as an efficient means to increase firm productivity. The empirical evidence is disputed, however. To assess the productivity effects of a broad variety of measures, we simultaneously account for both unobserved heterogeneity and endogeneity using establishment panel data for Germany. We show that increasing employee participation enhances firm productivity in Germany, whereas incentive systems do not foster productivity. Our results further indicate that firms with structural productivity problems tend to introduce organisational changes that increase employee participation whereas well performing firms are more likely to offer incentives. --high performance workplaces,microeconometric evaluation,firm productivity,panel regression

Gender Earnings Gap in German Firms: The Impact of Firm Characteristics and Institutions

Most existing analyses on the gender wage gap (GWG) have neglected the establishment as a place where inequality between male and female employees arises and is maintained. The use of linked employee-employer data permits us to move beyond the individual and consider the importance of the workplace to explain gender pay differentials. That is, we first provide a comprehensive study on the effects of various firm characteristics and the institutional framework on the GWG in Germany. The innovation of our research is that we do not just compare average male and female wages (of specific groups of employees), but look at within-firm gender wage differentials. Our results indicate that the mean GWG within firms is smaller than the average overall GWG. Furthermore, we can show that firms with formalized co-determination (works council) and those covered by collective wage agreements are more likely to have smaller GWG. It is also interesting to note that the wage differential between men and women decreases with firm size and increases with the wage level. --gender wage gap,unions,works councils,discrimination,within-firms wage differentials

How much does a year off cost? Estimating the wage effects of employment breaks and part-time periods

Discontinuities in the employment profile are supposed to cause wage cuts since they imply an interruption in the accumulation of human capital as well as a depreciation of the human capital stock built up in the past. In this paper, we estimate the return to effective experience, taking into account both the timing and the duration of non-work and part-time employment spells. Estimation results for German women suggest that deviations from full-time employment are associated with significant wage cuts owing to the depreciation of human capital. Postponing the discontinuity leads to a further fall of the wage rate. Controlling for individual heterogeneity with respect to industry sector and job position decreases the estimated depreciation rates. This we interpret as an indication for segregation in the labor market. We conclude that traditional wage estimations that do not control for depreciation underestimate the return to effective experience. --

Lower Wage Rates for Less Hours ? : A simultaneous wage-hours model for Germany

In this paper the impact of working hours on the gross hourly wage rate of West German women is analyzed. We use a simultaneous wage-hours model which takes into account the participation decision. First, our estimates show that the hourly wage rate is strongly affected by the working hours. In order to avoid any assumptions about the functional form, we estimate linear spline functions. Second, we detect different wage-hours profiles for specific groups of individuals. Despite these di¤erences, the wage reduction for jobs with less than 20 hours a week and for overtime hours turns out to be a robust result. However, the hourly wage rate of jobs with 20 to 38 hours does not differ significantly. Third, for West German women, the exogeneity assumption of working hours in the wage regression must be rejected if the wage-hours locus is assumed to be the same for all individuals. As a result of this the wage rate of full-time employees is overestimated in the standard OLS estimation

Do Hours Restrictions Matter ? : A discrete family labor supply model with endogenous wages and hours restrictions

The labor supply of West German married and cohabiting couples is analyzed using a discrete choice model. Following van Soest (1995), the labor supply decision is based on a household utility function which is determined by the leisure of the two spouses and net household income. Furthermore, heterogeneity of preferences and the German tax and benefit system are taken into account. We extend the neoclassical labor supply model in two directions. First, we allow for endogenous wages and find that there exist substantial wage differences between part-time and full-time jobs. In view of the negative wage differentials of part-time jobs, the model with endogenous wages predicts lower part-time employment than the standard neoclassical model. Compared with the distribution of actual hours worked, the share of part-time jobs is highly underpredicted. In a second step, hours restrictions are accommodated, as a result of which the estimated wage elasticities of both spouses are substantially reduced

Volterra composition operators between weighted Bergman spaces and weighted Bloch type spaces

We characterize boundedness and compactness of Volterra composition operators acting between weighted Bergman spaces $A_v, p$ and weighted Bloch type spaces $B_w$