Working-time reduction and employment - Oxford Journals

05 Bosch 209-243

30/01/01 9:35 am

Page 209

Cambridge Journal of Economics 2001, 25, 209–243

Working-time reduction and employment: experiences in Europe and economic policy recommendations Gerhard Bosch and Steffen Lehndorff* The paper seeks to evaluate the evidence on the employment effects of the collective working-time reductions in Europe over the past 20 years. While theoretical analyses produce contradictory assessments, most empirical studies show positive employment effects but take insufficient account of the conditions under which the reductions in working time were implemented. These conditions for the success of collective working-time reductions include an active training policy designed to minimise skill shortages in the labour market, the modernisation of work organisation, wage increases in conjunction with productivity gains and a more equal income distribution. Key words: Working-time reduction, Employment effects, Working time in Europe JEL classifications: E24, J22, J50, J68 The full employment policy by means of investment is only one particular application of an intellectual theorem. You can produce the result as well by consuming more or working less. Personally I regard the investment policy as first aid . . . Less work is ultimate solution . . . How you mix up the three ingredients of a cure is a matter of taste and experience, i.e., of morals and knowledge. (Keynes 1945, p. 384)

1. Introduction In the middle of the last century—rather later in some countries—a long-term process of working-time reduction began. Despite interruptions, that process continues today. Nobody denies that reductions in working time are one way of distributing increased prosperity. Some economists also stress that these ‘reductions have played an important role in reconciling full employment with productivity gains’ (Drèze, 1986, p. 36). According to these authors, therefore, the productivity gains of the past 150 years would have led to high unemployment if working time had not been cut. Some of these authors argue further that working-time reductions are not suitable for use as an instrument of short-term employment policy. Rigidities in work organisation or higher wage costs are frequently adduced as evidence in support of this position (Drèze, 1986, p. 44). Manuscript received 19 August 1997; final version received 16 March 2000. Address for correspondence: Dr S. Lehndorff, Institut Arbeit und Technik, Muncheidstrasse 14, 45886 Gelsenkirchen, Germany; email [email protected] * Institut Arbeit und Technik, Department for Labour Market Research, Gelsenkirchen, Germany. Thanks go to the anonymous referees for their criticism of earlier drafts of this paper. The responsibility for any remaining shortcomings and errors is the authors’.

© Cambridge Political Economy Society 2001

05 Bosch 209-243

30/01/01 9:35 am

210

Page 210

Gerhard Bosch and Steffen Lehndorff

Thus, what is considered self-evident over the long term is regarded as unfeasible in the short term. Such a position can hardly be considered satisfactory unless it is assumed that we have reached the ‘end of history’ as far as working time is concerned. This is not a proposition with which we can concur. The high and rising rates of unemployment in many countries indicate that full employment cannot be achieved through economic growth alone. It was precisely for this reason that John Hicks described the reduction of working time as a means of avoiding ‘secular unemployment’ (Hicks, 1946, p. 301). Nor is there any theoretical argument why increased prosperity should in future be distributed solely in the form of higher wages and not also as shorter working times. It seems to us necessary to close the gap in the argument between the short-term and long-term perspectives, and to ask under what conditions reductions in working time might lead to higher employment and how these conditions might be incorporated into policy strategies on working time. This is one area in which there is a gaping hole in workingtime research. Apart from the fundamental methodological problem of isolating the effects of working-time reductions from those of other factors, such as technical progress, growth etc., to which we shall return later, it cannot be argued that the reduction of working time is not in itself an instrument of employment policy simply because researchers have concluded that a particular form of working-time reduction in one country has not led to higher employment. It may be that this effect was produced by certain peripheral conditions, such as excessive wage increases, traditional management styles, labour market shortages etc. Under different conditions, working-time policy can be very successful. Only a few authors (e.g., Whitley and Wilson, 1986) identify the conditions necessary for a strong employment effect of working-time reductions. The conclusion of their thorough analysis of a reduction in standard working hours is: ‘It is, however, clear, that the success of any policy in terms of employment would be highly dependent upon minimising the degree of offset due to productivity gains and increased overtime working, while at the same time avoiding any adverse effects on costs’ (Whitley and Wilson, 1986, p. 58). If we can identify these peripheral conditions, thereby making it possible to be more precise about the implementation of working-time reductions, then a little objectivity might perhaps be injected into the quasi-religious controversy between supporters and opponents of working-time reductions. However, empirical research is also required; such research cannot be confined to the macro level but must also penetrate the ‘black box’ of firms, where decisions on appointments and dismissals are ultimately made. In what follows, we shall seek to contribute some findings on the implementation of working-time reductions. In so doing, we shall concentrate primarily on collective workingtime reductions, i.e., the reduction of statutory or collectively agreed weekly or annual working time for large groups of workers. This form of working-time reduction is also the most controversial. For reasons of space, we shall not consider other forms of workingtime reduction. We shall begin by discussing the contentious issues in the theoretical debate on working-time reductions (Section 2). The next two sections will be given over to a summary of the empirical research on the effects of working-time reductions. We shall look first at the evolution of working time, income, productivity and work organisation over the last 120 years (Section 3). There then follows an outline of some of the significant findings on the employment effectiveness of the working-time reductions implemented in the past 15 years (Section 4). Finally, we shall seek to draw some conclusions from these empirical findings for a policy of working-time reduction intended to produce employment effects (Section 5).

05 Bosch 209-243

30/01/01 9:35 am

Page 211

Working-time reduction and employment

211

2. Contentious issues in the working-time debate The debate on the employment effects of collective working-time reductions has spotlighted three groups of topics in particular. The first concerns the effects of working-time reductions on firms’ costs and competitiveness, the second the question of whether overtime is increasing rather than work being redistributed among more people and the third the issue of whether working-time reductions are a solely defensive solution that hinders growth and innovation. First, let us look at the effects on costs. The assumption that what ensues is a negative employment spiral is typically justified by an argument of the following kind: ‘If employers are forced to pay higher wages, the firm’s labor cost will rise. Employers faced with higher labor costs can reduce output or substitute other factors of production for the now more costly labor’ (Perloff and Wachter, 1978, p. 88). However, the decisive factor for firms is unit costs, not absolute wage costs. When working time is cut, unit costs can be influenced by the wage rise agreed in compensation for the reduction, by the ensuing productivity effects and, finally, by changes in operating hours. The link between the reduction of working time and production costs is outlined in Figure 1 (Cette and Taddei, 1994, p. 53). When cuts in working time are combined with compensatory wage increases so that monthly pay remains the same despite shorter monthly working time, it is commonly assumed that the cake is being distributed twice, i.e., that the compensatory wage increase is being paid in addition to the usual pay rises. If this were the case, then working-time reductions would indeed lead to specific cost increases. ‘Only if incomes are shared (or productivity increases) . . . could a cost-push-spiral be avoided’ (Whitley and Wilson, 1986, p. 45). As a matter of fact, it is entirely possible for cuts in working time and pay increases to be negotiated as a total package. In this case, the wage increase paid in compensation for the working-time reduction can be offset by lower pay rises. If a package of this kind ensures that the increase in costs does not outstrip the gain in productivity, then

Figure 1. The reduction and reorganisation of working time and production costs. Source: Cette and Taddei (1994).

05 Bosch 209-243

30/01/01 9:35 am

212

Page 212


unit wage costs will remain constant. If the aim is to reduce working time quickly and in larger steps than can be achieved by offsetting any rise in unit wage costs against the expected gain in productivity, then the compensatory wage increase will have to be abandoned altogether. If longer-term package deals can be agreed on, however, then larger cuts in working time can be combined with compensatory wage increases while at the same time ensuring cost neutrality. Nor will international competitiveness be adversely affected, provided that unit wage costs do not rise more quickly than in competitor countries. In analysing the scope for distribution, account needs also to be taken of the fact that the reduction in working time can also be an independent source of productivity gains. Such productivity effects can be achieved by changing work organisation and using labour more intensively. The productivity increases produced by cuts in working time have the effect of lowering costs and constitute a source of finance for the cut in working time. In capital-intensive plants, unit capital costs have a greater effect on total unit costs than wage costs. If a cut in working time reduces capital utilisation times, unit costs may rise significantly, with the negative employment effects already outlined above (NeiferDichmann, 1991). However, if working time is decoupled from operating hours, thereby allowing capital utilisation time to remain constant or even to rise, then unit costs may even be reduced (van Deelen, 1987). In this case, it is conceivable that even large and rapid cuts in working time with full wage compensation could be implemented without increasing costs, provided they were combined with an extension of operating hours. More intensive utilisation of capital stock has a more favourable effect on costs than an increase in operating hours, since the same number of units can be produced in shorter operating hours by reducing machine downtimes, continuing production during breaks etc. In such a situation, firms do not face rising marginal wage costs because of night and weekend bonuses and other additional costs (electricity costs etc.) (Bosch, 1989). This principle cannot necessarily be transferred to the service sector. Longer opening hours do not lead to a reduction in costs unless there is a corresponding rise in turnover. If there is no such rise and firms, such as retail outlets, are forced by the pressures of competition to extend their opening hours, then their cost situation will deteriorate. Thus, as the service sector’s share of economic activity continues to rise, only an ever-declining proportion of employees can have their reductions in working time financed by more intensive utilisation of capital stock. In the event of working-time reductions, therefore, the pay issue is of greater consequence for the evolution of unit costs in the service sector than in manufacturing. Secondly, even if the productivity effects that reduce the volume of work to be distributed are taken into account, some of that work will still be available for redistribution in the event of a cut in working time. The question is whether firms will actually hire more workers or simply increase the volume of overtime. Fixed employment costs, e.g., training and recruitment costs, provide incentives to extend the use of overtime. If social security contributions are paid on a per capita basis rather than for each hour of paid work, as is the case with many of the health insurance and pension schemes operated by US companies, then fixed costs rise dramatically and any redistribution of working time becomes very expensive for firms (Cutler and Madrian, 1996). If social security contributions are paid on the basis of hours worked, on the other hand, then their role in any policy of work redistribution is a neutral one. If, as part of their strategy for managing the transition from mass to quality production, firms invest increasingly in their employees’ human capital, then fixed costs rise and, with them, the incentives to make increased use of overtime. A second reason for increased use of overtime may be employers’ conservative attitudes to work organisation. If firms that have cut working time wish to employ more workers in

05 Bosch 209-243

30/01/01 9:35 am

Page 213


213

order to maintain the same level of output, they might have to introduce new shift systems or forms of work organisation. If they have no experience of this or if, in the event of a radical change in the organisation of working time (e.g., changeover from a 40-hour to a 35-hour week), where there are perhaps no tried and tested models, reorganisation can be a costly business and the learning costs high. Fear of an experiment with uncertain learning costs can lead to the development of a conservative attitude to work organisation and the consequent retention of familiar systems that make extensive use of overtime. In an environment conducive to reform, on the other hand, in which experiences are exchanged and individual learning costs thereby reduced, new models of company organisation with shorter standard working times can be diffused more rapidly. Finally, labour shortages may restrict the opportunities for redistribution. If there is not an adequate supply of sufficiently highly skilled labour, the volume of overtime worked, particularly by skilled workers, will increase. Thus it will be more difficult to implement a policy of work redistribution in countries that do not have an adequate supply of unemployed skilled workers than in countries in which the supply of skilled labour is being increased, for example through an active labour market and training policy. Overtime bonuses constitute an economic incentive for employers to avoid overtime. Attention must also be paid to non-economic factors. Thus, overtime can be restricted by legislation or collective agreement, and it can also be tolerated or resisted by works councils, trade unions and society at large. In this case, however, the higher fixed costs may make a significant difference to firms’ overall costs, and thereby reduce profitability, if they are not partially offset by public subsidies (e.g., through the provision of training programmes for the unemployed or the payment of training subsidies to firms). Thirdly, it is frequently argued that working-time reductions can only be the ‘fruit of economic success’ (Huber and Roth, 1989, p. 3). From this point of view, working time is not one of the factors that promote growth. Rather, working-time reductions are regarded as a brake on growth, since lower pay rises restrict purchasing power and since the reduction of operating hours can be equated to a reduction in the capital stock. The operating hours argument has recently been extended to human capital. Apart from the question of whether more free time is not only an optimal and desirable way of increasing welfare but also a precondition for the consumption of new goods and services, the following counter-arguments can be put forward. If working-time reductions have positive employment effects and unemployment falls, purchasing power is not reduced. Short and, at the same time, flexible working times can also have positive effects on the labour supply; as a result, the female labour supply in particular rises, making available to employers a skilled and hitherto under-utilised source of human capital. The same applies to the human capital of those previously unemployed who find a job as a result of the cut in working time; at the same time, the depreciation of human capital through longterm unemployment (hysteresis effect) is also avoided. The shorter working times become, the greater the economic incentives are for firms to decouple working time and operating hours and to extend operating hours. This would amount, in effect, to a more cost-effective way of expanding the capital stock. Working-time reductions provide the impetus for further innovation, since labour becomes scarcer: ‘abundant labour, like the salt on the edge of a plate, tends to be wasted’ (Habakkuk, 1967, p. 48). On the one hand, firms are likely to look for labour-saving technical processes, with positive effects on investment activity; on the other, they will tend to modernise their entire system of work organisation in order to increase labour productivity. Numerous technical and organisational innovations would have been inconceivable without this spur to productivity.

05 Bosch 209-243

30/01/01 9:35 am

214

Page 214


On the purely theoretical level, therefore, arguments can be adduced for and against the beneficial employment effects of working-time reductions. It has been our aim here to show that working-time reductions do not necessarily lead to more overtime, increased unit costs and reduced growth. What effects are actually produced can be established only by empirical analysis. Purely theoretical calculations are of little use here. Those who do rely on them to draw conclusions about the real-life effects of working-time reductions merely become entrapped in circular arguments. This problem can be seen in Brems’ work. He calculates the theoretical effects of various forms of working-time reduction (with and without compensatory wage increase, with and without a cut in machine utilisation times), conducts no empirical investigations and yet comes to the following conclusion about trade union demands for cuts in working time: ‘We have found negative effects on employment of such shortening and must ask . . . are unions acting irrationally?’ (Brems, 1989). The OECD has taken a very critical stance towards similar approaches, noting that; ‘However, when a number of other factors are taken into account the result becomes indeterminate (OECD, 1998, p. 178). Other important factors mentioned by the OECD are the possible intensification of the work process that might accompany a cut in working times, together with the company reorganisation to which such a cut might give rise, and which would lead, in turn, to higher productivity Before we take a look at some of the empirical evidence, however, we have to define what we actually understand by ‘employment effects’. A positive employment effect cannot be equated simply with a decline in the unemployed population. If the participation rate rises, the size of the employed and unemployed populations can rise at the same time. Employment effects can also manifest themselves in very different forms, of which the creation of new jobs is just one. Others include the avoidance of redundancies, or a reduction in their number, and the ‘stockpiling’ of employees’ working time through involuntary part-time or short-time working. With the last two forms, employers do not have to bear any recruitment or training costs. Furthermore, the employment effects can manifest themselves immediately, since there are no lags caused by search and training times. Thus, in investigating employment effects, it is not only the effects of growth, technical progress and working-time reductions that have to be isolated. At the same time, the problem of filtering out the employment effects from the various quantitative changes taking place in the labour market (recruitments, dismissals, variations in individual working times) also has to be dealt with. An argument against the employment effectiveness of working-time reductions cannot be constructed simply by taking account of recruitment and the fact that jobs have been lost in industries in which working time has been reduced (as does Neifer-Dichmann, 1991). 3. The long-term evolution of working time, productivity, growth and pay A glance at the long-term evolution of working time and pay shows that it has been possible both to reduce working time considerably and to increase pay significantly as well. In 1870, workers in most of the present-day industrialised countries had to work on average between 2,900 and 3,000 hours per year (Maddison, 1995). Since then, average working time has declined by up to 50% (Table 1).1 In brief, the figures show that, from the standpoint of the last century, most full-time workers in the Western industrialised countries 1 It is true that these estimates also include the effects of part-time work; however, since it is only in the past 20 years that part-time work has become a widespread and rapidly growing social phenomenon, the account of the long-term evolution of working time is not significantly distorted by this effect.

05 Bosch 209-243

30/01/01 9:35 am

Page 215


215

Table 1. The evolution of working time, productivity per hour worked and gross national product per capita in % (1870–1992)

Working time Productivity per hour worked Gross national product per capita

USA

Germany

Japan

France

Great Britain

–46·3 +1,287·6

–46·9 +1,734·7

–36·3 +4,352·2

–47·6 +2,127·9

–50·0 +918·8

+918·6

+998·3

+2,632

967·1

+501·7

Source: Maddison (1995).

today work part-time. Gross domestic product (GDP) per capita which, in the absence of any other data, we shall take as a very rough indicator of the evolution of material wellbeing, has risen five to tenfold over the same period.1 In Japan, where industrialisation started later, GDP per capita has even risen by a factor of 26. The rise in hourly productivity has considerably outstripped that in earnings over the past 120 years. In the USA in 1992, hourly productivity was almost 13 times higher than in 1870, and in Germany it was more than 17 times higher. The increase in productivity has been considerably higher than that in earnings, and it has been possible to distribute the increased prosperity in the form both of shorter working time and of rising real incomes. There is a great deal of often qualitative evidence put forward by industrial sociologists and economic historians which suggests that firms that cut working time also change their system of work organisation. At the beginning of the Industrial Revolution, labour was used extensively, i.e., by making working time as long as possible. Deutschmann (1985) has shown in his historical analysis how non-intensive production systems were in the early stages of the Industrial Revolution. Production was still dependent on natural energy sources, such as water and wind, and stoppages were frequent. Work was badly organised, with plenty of opportunities for unauthorised breaks. As working-time reductions were pushed through by trade unions and legislatures,2 constraints were placed on the extensive utilisation of labour, making it necessary to make more intensive use of labour and machinery. The most important factors contributing to the more intensive use of working time were scientific management and the mechanisation of production. With the introduction of scientific management (Taylor, 1947), the work process was divided into standardised tasks, each with an exact time allotted to it. The mechanisation of production gave firms control over work rates. Scientific studies of the work process proved that, when tasks were so highly concentrated, productivity declined considerably when working time was long. Daily, weekly and annual recovery periods became necessary (Semmer et al., 1995). Continuity of production was closely linked with stable demand, which became more independent of fluctuations in local markets. The extension of markets to the national and, 1 One factor for which per capita GDP should be corrected is the change in the participation rate, i.e., the ratio of the economically active population to the population as a whole. In the USA, the participation rate rose between 1870 and 1992 from 36·1% to 46·1%, and in Great Britain from 40·1% to 44%; in Japan, it declined from 54·3 to 51·8% (Maddison, 1995, p. 272). These figures conceal a whole range of different developments, including a decline in child labour, longer schooling, increasing female participation etc. 2 Even before statutory or collectively agreed working-time reductions were implemented, individual firms had already recognised that production could be more efficient with shorter working times. However, the vast majority of firms did nothing until the collective working-time reductions were introduced.

05 Bosch 209-243

30/01/01 9:35 am

216

Page 216


Table 2. Annual rates of change in machine utilisation times and operating hours in the USA 1929–63 (in %)

Year

Annual machine utilisation times (1)

1929–63 1929–54 1954–63

1·17 1·00 1·65

Weekly operating hours (2) 0·46 0·51 0·35

(1) as % of (2) (3) 0·39 0·51 0·21

Source: Foss (1984:23)

increasingly, international level became the precondition for mass production. Product standardisation led to reduced costs when output volumes were high, and the development of storage techniques made it possible to buffer the production process from shortterm market fluctuations (Deutschmann, 1985). The standardisation of tasks was also a fundamental precondition for allocating several workers to the same job, thereby making it possible to decouple individual working times and operating hours from each other by introducing shift work. In the case of the USA, Foss shows that, in the course of development, the industrial capital stock was used both more intensively (fewer stoppages) and more extensively (longer operating hours). Thirtynine per cent of the increase in machine operating times between 1929 and 1963 can be explained by an increase in operating hours. The rest is accounted for by a reduction in machine stoppage times, i.e., more extensive utilisation of the capital stock (Table 2). Foss also calculates the capital-saving effects of changes to the organisation of operating hours in American firms between 1929 and 1976. During this period, the gross capital stock in the USA rose by 166%, an annual growth rate of 2·1%. The annual increase in operating hours of 0·46% amounted to about 22% of this increase in the capital stock. Without an increase in operating hours during this period, American manufacturing industry would have had to increase its capital stock not just by 265·9% but by 331·6% (an additional 200 billion dollars) in order to achieve the level of output produced in 1976 (Foss, 1981, p. 26). Shorter working times did not prove to be an obstacle to more extensive utilisation of the capital stock; all that was necessary was a reorganisation of the shift system. In the last century, continuous (7-day) production plants operated a two-shift system; at the beginning of this century, there was a changeover first to three-shift and then, after World War II, to four-shift operation. In countries in which working time has been further reduced in recent years, five- and even six-shift systems are now being introduced.1 This connection between working time and work organisation also works in the opposite direction. Thus, there are cases in which increases in working time have facilitated a return to traditional, extensive forms of work organisation. The sweatshops in the USA come immediately to mind, as does the current regressive trend in work organisation in many German construction firms, where a plentiful supply of cheap, illegal labour is forcing the abandonment of a form of organisation based on team work and high skill levels and a return to a hierarchical, Taylorist form based on wide differences in skill levels. These aspects have been considered little in the economic debate.2 The reduction in 1 In France and the Scandinavian countries, working time for continuous shift workers has been reduced in some cases to 35 hours per week; this has created the impetus for the development of new shift systems. 2 One exception is the outstanding work of Görres (1984).

05 Bosch 209-243

30/01/01 9:35 am

Page 217


217

working time is regarded primarily as a defensive policy that conflicts with the proactive growth policy that is actually required (Neifer-Dichmann, 1991). However, we take the contrasting view that the reduction in working time over the last 100 years has not only constituted a policy of redistribution but has also been an important factor in economic growth. True, these reductions in working time were largely forced on employers by legislation and collective agreements, but they did spur firms to introducing new forms of work organisation. The 8-hour day and the 40-hour week became fixed points of reference for firms, around which they developed the paradigms of work organisation. 4. Working-time reductions as employment policy: some experiences from the past 15 years Can working-time reductions also be used as a short-term instrument of employment policy? We shall seek to answer this question by examining experiences with collective working-time reductions in Western Europe over the past 15 years. At the end of the 1970s, a wave of statutory or collectively agreed working-time reductions was being launched in a number of Western European countries (Bosch et al., 1994). The initial pace was set by Belgium, which is still, with Denmark, Germany and the Netherlands, one of the countries with the shortest collectively agreed average working times. Other countries followed in Belgium’s wake, including Great Britain (39-hour week in the engineering industry in 1981), France (legislation introducing the 39-hour week passed in, 1982), the Netherlands (38-hour week introduced in many industries between 1983 and 1986) and Germany, where, after major strikes in the engineering and printing industries, the process of reducing working time below the 40-hour level in many parts of the economy began in 1985. Germany was one of the few European countries in which collective working-time reductions continued both in the second half of the 1980s and during the recession of the first half of the 1990s, although at an increasingly slow pace. In this phase, the spotlight in many European countries fell on cuts in working time at plant level, the primary purpose of which was to avoid redundancies (employment protection agreements). Only recently, mainly in some industries and firms in the Dutch service sector, has there been a return to industry-wide collective agreements on working-time reductions (ATOS, 1997). At the moment, however, the strongest policy initiative in this field is undoubtedly being taken in France, where by the year 2000 (2002 for small firms) standard weekly working time is to be restricted by law to 35 hours. The collective working-time reductions have left their mark on working-time statistics. Thus, actual weekly working time for full-timers in Germany and Denmark fell considerably between 1983 and 1993 (Table 3). In France, it remained unchanged, which reflects the standstill in collective working-time reductions in this period. In other countries, on the other hand, particularly in Great Britain and the USA, the actual annual working time of full-timers has increased. The distribution of working time among employees is as important as average figures on increases or decreases for an understanding of its evolution. In Germany, collectively agreed working time still is the decisive factor in determining actual working time for the vast majority of men, and also for a high proportion of women (Figure 2). As collectively agreed working-time norms fell, so actual working times decreased. In France, working time has not been reduced in recent years, but the statutory weekly working time of 39 hours has had a strong normative and standardising effect on actual working time. In Great Britain, in contrast, there is no longer any effective working-time standard at all;

05 Bosch 209-243

30/01/01 9:35 am

218

Page 218


(a)

(b)

(c)

Figure 2. Usual weekly working hours, employees: (A) Germany, men, 1987, 1990, 1995; (B) Germany, women, 1987, 1990, 1995; (C) France, men, 1987, 1990, 1996;

05 Bosch 209-243

30/01/01 9:36 am

Page 219

Working-time reduction and employment (d)

(e)

(f)

(D) France, women, 1987, 1990, 1996; (E) UK, men, 1987, 1990, 1995; (F) UK, women, 1987, 1990, 1995. Source: Eurostat special tabulation.

219

05 Bosch 209-243

30/01/01 9:36 am

220

Page 220

Gerhard Bosch and Steffen Lehndorff Table 3. Estimates of actual annual working hours for full-time employees (1983/1987/1993)a

Belgium Denmark Germany (W) France Greece Britain Ireland Italy Luxembourg The Netherlands Portugal Spain EUR 12

1983

1987

1993

1,739·0 1,833·6 1,808·2 1,785·3 1,852·9 1,903·8 1,870·9 1,741·1 1,778·6 1,863·3 no data. no data no data

1,711·3 1,784·0 1,777·7 1,789·9 1,821·1 1,942·7 1,879·1 1,718·6 1,767·9 1,787·5 1,904·8 1,831·2 1,809·7

1,711·2 1,746·8 1,738·7 1,790·0 1,835·4 1,952·7 1,859·1 1,709·7 1,769·0 1,788·4 1,857·7 1,807·1 1,797·1

a Estimation including LFS data on hours usually worked per week, public holidays, annual leave, short time working, absenteeism (due to sickness, training, maternity leave). The European Labour Force Survey (LFS) is based on a common methodology applied in all EU member states. The figures may differ from national statistics drawing on different methodologies. Source: Eurostat (1995).

despite the wide dispersion of actual weekly working times, however, a pattern of very short working times for women and very long working times for men can be discerned. If such a standard is lacking, then there is no basis for a policy of collective working-time reductions. Since actual working time for different groups of workers differs so much, it is no longer clear what full-time or part-time work actually means. Many of the British employees who work 45 hours and more might, under some circumstances, regard a 40-hour week as part-time work. One important cause of these international differences in working time is to be found in the collective bargaining systems and the different ways in which trade union bargaining power has evolved. Using its indicators for the strength of collective bargaining systems (trade union density, collective agreement coverage and degree of centralisation in the collective bargaining system), the OECD (1998, p. 167) has identified a trend across 11 industrialised countries: ‘in those countries in which collective bargaining is more highly developed, working time falls more quickly’.1 Similar differentiation can be found in the evolution of working-time preferences (Table 4). ‘Countries with strong preferences for shorter working time also (had) a larger reduction in actual working time’ (OECD, 1998, p. 166). One reason for this surely lies in the wide variations in individual working times, which means that money rather than time has now to regarded as the common denominator for employees’ preferences. Another reason is to be sought in the wider earnings differentials in countries with weak unions. (We shall return to this topic in Section 4.2 below.) What consequences did the collective reductions in standard working time have on employment in those countries in which they were implemented? In what follows, we start 1 One important exception is Sweden, where the trade unions have not yet sought to make reductions in weekly working time an object of collective bargaining.

05 Bosch 209-243

30/01/01 9:36 am

Page 221


221

Table 4. Working hours and earnings preferences of workers, European Union, 1985 and 1994a Percentage of employees preferring:

Belgium Denmark Germany France Greece Britain Ireland Italy The Netherlands Portugal Spain

More earnings

Fewer hours

1985

1994

1985

1994

58 38 56 62 68 77 78 55 46 82 64

48 32 54 53 84 62 59 54 43 58 70

36 51 30 34 26 19 19 39 47 11 31

40 66 34 40 14 32 37 39 52 35 24

a The question asked, which was identical at both points in time, was: ‘If the choice were offered in the next pay round between an increase in pay for the same hours of work and shorter working time for the same pay you get now, which would you prefer?’ Respondents could choose between answering ‘increase in pay’ or ‘shorter working time’. ‘Don’t knows’ are not detailed here. Source: OECD (1998).

by providing a brief survey of the empirical research on this issue. We then summarise some of the experiences that seem to us particularly important for defining the conditions under which working-time policy can have a favourable impact on employment. 4.1 Empirical estimates of the employment effectiveness of collective working-time reductions The major problem in all empirical studies of the employment effects of working-time reductions lies in the difficult task of distinguishing between the influence of the three factors of growth, productivity and working time on employment. In theory, it is impossible to make a clear distinction on either the macro- or the micro-economic level. However, the range of expected employment effects can be narrowed down by ensuring that the assumptions on which any estimates are based are as theoretically and empirically well founded as possible. The empirical estimates are based on one of four different methodological approaches: regression analyses surveys of firms and case studies macro-economic simulations so-called ‘decompositions’. Regression analyses are used in an attempt to estimate the employment elasticity of working-time reductions on the basis of statistical time series on growth of hours worked, employment and other variables. Studies of various Western European countries in various periods have produced employment elasticities of between –0·4 and –0·7, i.e., for example, an increase in employment of 2 or 3·5% for a change in working time of –5% (cf.,

05 Bosch 209-243

30/01/01 9:36 am

222

Page 222


Table 5. Company surveys on the employment effects of collective working-time reductions (selection) Country

Working-time reduction Nature of investigation

France

39-hour week 1982

Employment effects found

Company survey carried out in 1983 by the government statistical service INSEE The Industry-wide collective Company survey carried Netherlands agreements on 38-hour out by Loontechnische week (shorter in some Dienst cases) 1982–85

Germany

Germany

Germany

Germany

26% of firms: new recruitment; 11%: reduction in job losses; 59%: no change in employment 15% of firms: new recruitment (with employment effect of about 20–25%; 3·5%: existing jobs safeguarded; 78%: no change in employment Reduction of working Surveys of works councils Employment effects of 70%, time in 3 stages to 38·5, at each stage by IG Metall 58% and 70% respectively 37·5 and 37 hours (about 5,000 plants) (engineering industry) First stage in the Company survey by Employment effect of 21% reduction of weekly engineering employers’ (plus 14% extra overtime, working time to 38·5 association (about which was later reduced) hour in 1985 5,000 plants) (engineering industry) Reduction of weekly Establishment and staff Employment effect of 52% working time to 39 hours council survey by market (public service) research institute Infratest First stage of reduction Survey of works councils Employment effect of 66% in weekly working time by IG Druck trade unions to 38 hours in 1985 (450 plants) (printing industry)

Sources: ATOS (1997); Cette and Taddei (1994); Seifert (1991).

Görres, 1984; Björklund and Freeman, 1995; Hunt, 1996 and the literature cited there). However, there are also some studies that estimate the employment effects to be considerably lower (e.g., Hunt, 1996), neutral or even negative (e.g., König and Pohlmeier, 1987). This variation is no accident, since the methodological problems begin with the choice of period to investigate. The most important thing to be aware of, however, is that the data on which regression analyses are based conceal a multiplicity of economic processes; this makes it difficult to filter out, in a ‘pure form’, the interaction of the few factors to be observed. This gives rise to an illusory precision that is not justified by the quality of the data. The second type of approach, namely surveys of companies and works councils and case studies, has to contend with the same problem. The problem at the micro level is that interviewees cannot clearly distinguish between the employment effects of the evolution of production and those of working time. The actors at firm level merely estimate the extent to which the changes in the verifiable numbers of employees in each plant are attributable to the evolution of production and of productivity respectively, with the ‘remainder’ being assumed to be attributable to the working-time reduction. Studies using this approach make generalisations about the national economy on the basis of the estimates made at firm level. The results are heavily influenced by who asks the questions and who answers them. Nevertheless, it has to be said that none of the surveys known to us has concluded

05 Bosch 209-243

30/01/01 9:36 am

Page 223


223

Table 6. Average reaction times in the adjustment of factors in French manufacturing industry (in quarter years) Reaction to a change in Demand Working time Operating hours Size of workforce Capital stock

Labour and capital costs

2 4 4 13

4–5 7 10–13 19–20

Source: Cueva (1994). Cited in: Cette and Taddei (1994, p. 60).

that the collective working-time reduction in question has had no employment effect, or even a negative one (Table 5). One difficulty with company surveys can also be that they merely produce snapshots. However, firms’ reactions to changes in external conditions are usually delayed, with the lags varying depending on the specific impetus and the form of reaction. An econometric study carried out in French manufacturing industry has recently revealed the differences between firms in the timing of their adjustment to external stimuli (Table 6). This hierarchy of reaction speeds is also shown in the deferred reactions of firms to working-time reductions. Thus in 1985, the reduction of weekly working time in the German engineering industry from 40 to 38·5 hours in many plants initially triggered a rise in the volume of overtime (Bosch et al., 1988; cf., also in Table 5 the company survey conducted by the employers’ association). The Deutsche Institut für Wirtschaftsforschung (DIW, or German Institute for Economic Research) has estimated that one-third of the 1·5-hour cut in working time was initially offset by a short-term increase in overtime; only later did the volume of overtime begin to decline: ‘It was not until the next downturn in the economy that . . . the increased volume of overtime was further reduced and the job-saving effect thereby achieved’ (Stille and Zwiener, 1997, p. 90). French studies have also drawn attention to delays in adjusting manning levels to shorter working times (cf., Cette and Taddei, 1994, p. 147). The immediate reaction of many French firms to the introduction of the 39-hour week was to intensify the work process (e.g., by reducing cycle times) in a way that could not be sustained over the medium term. As has been estimated by means of macroeconomic simulations, the ensuing productivity increase fell gradually from an initial 75% to about 50%, so that the employment effect of the working-time reduction made itself felt only by degrees (Table 7). Similar developments can be observed in the Netherlands. Many of the cuts in weekly Table 7. The step-by-step adjustment of manning levels in the French economy following the introduction of the 39-hour week (in 000s of employees)

Employment Unemployment

1st year

2nd year

3rd year

85 –45

130 –55

145 –60

Source: Cette/Taddei (1994).

05 Bosch 209-243

30/01/01 9:36 am

224

Page 224

Gerhard Bosch and Steffen Lehndorff Table 8. Employment effects of collective reductions of working hours in the the Netherlands 1983–87 (1,000)

Private Public/subsidised Total

1983

1984

1985

1986

1987

Total

3 3 6

8 7 15

9 8 17

10 19 29

4 4 8

34 41 75

Source: Ministerie van SZW, cited in ATOS (1997, p. 20).

working time from 40 to 38 hours in the Dutch private sector took place during the recession of 1983–84. The fairly modest employment effects recorded in the first statistical survey conducted by the labour market authorities (cf., Table 5) were accounted for by the surplus capacity that existed at the time of the working-time reductions. Furthermore, case studies ascertained that staff shortages were initially filled by overtime, fixed-term contracts and subcontracting (de Lange, 1989). It was not until the Ministry of Labour undertook a subsequent assessment, based on an econometric estimate, that a considerably more positive picture emerged for the longer period between 1983 and 1987 (Table 8). Thus the employment effects of working-time reductions in the countries mentioned here were distributed over the economic cycle. Consequently, a dynamic approach has to be adopted if the employment effects of a cut in working time are to be assessed adequately.1 The example of the delay in adjusting manning levels to shorter working times shows that surveys and, particularly, case studies can be very valuable, despite the methodological problems already referred to. They provide information about the way in which firms implement working-time reductions, thereby making it easier to draw conclusions about the effects of the working-time reduction on overtime, shift systems and operating hours, and hence on productivity and employment. Thus, for example, we were able to show in case studies conducted in two German car plants how personnel managers adjusted to the step-by-step introduction of working-time reductions in the 1980s. Manpower planning in these two plants was based on an assumed productivity increase of 20% and 40%, respectively, of the percentage decreases in working time, so that the immediate employment effect at the time of the reduction was 60% or 80% of the arithmetically feasible effect. However, these were the average values in an extremely variable range of reactions: 80% to almost 100% in production departments contrasted with an employment effect of virtually zero among white-collar workers (Lehndorff, 1995). This finding was in line with other estimates based on company surveys that put the productivity effects at between 30% and 60% of the arithmetically possible employment effect. The scope for productivity increases and work intensification differed by industry and category of employees and, as studies have shown, was lowest among production workers (Stille and Zwiener, 1997, p. 22; Cette and Taddei, 1994, p. 78). The most recent estimation of the employment effects of working-time reductions based on company data is that carried out by the French Ministry of Labour (Ministère de l’Emploi et de la Solidarité, 1999; European Industrial Relations Review, 1999). Before the introduction of the statutory 35-hour week, from mid-1998 to mid-1999, firms were granted state subsidies if they concluded company agreements on the advance implementation of the 35-hour week and, at the same time, put a figure on the number of workers to be hired 1 Whitley and Wilson (1986), in contrast to many other authors, integrate time lags into their model calculations.

05 Bosch 209-243

30/01/01 9:36 am

Page 225


225

Figure 3. Employment performance of firms with and without working-time reduction under the first phase of the ‘Aubry’ law in France. Source: Ministère de l’Emploi et de la Solidarité (1999).

or to be protected from redundancy as a result of the shorter working hours. In its analysis of all company agreements concluded within that period of time, the Ministry of Labour compared employment levels in the companies with shorter hours with those in all other firms of the same size in the respective industries. It was found that the employment performance of companies with agreements on the 35-hour week was better than average but had already been so before the working-time reductions, which may indicate that the more dynamic and successful companies are more likely than average to review and reorganise their working-time organisation. The employment effect of the working-time reduction was then estimated by comparing the actual employment levels with the potential trend without working-time reduction (taking into account employment levels in the firms without working-time reductions). It was thus found that the ‘net’ employment effect after the working-time reductions was about 60% of the ‘mechanical’ employment effect of the working-time reductions as defined in the agreements (Figure 3).1 The advantage of the third type of approach, namely macroeconomic simulations, over the first two methods already outlined is that it can form the basis of an attempt to understand and depict the interaction of numerous economic variables. A range of alternative scenarios can be developed ex ante, in which the effects of various assumptions, e.g., about compensatory pay increases, can be calculated. These various assumptions then produce a more or less broad range of possible development paths. Of course the quality of such simulations depends to a large extent on the proximity to reality of the underlying assumptions. The French econometricians Cette and Gubian (1998, p. 99) put it appositely: ‘The “realism” of a scenario depends on the decisions taken previously by the person responsible for the modelling, who is not necessarily better qualified than anyone else to judge its social and political relevance.’ Thus, in order to make the assumptions on which 1 The overall employment gain in the preparatory phase of the legislation was thus estimated at some 100,000 jobs.

05 Bosch 209-243

30/01/01 9:36 am

226

Page 226


Table 9. Ex ante simulations of the employment effects of a cut in working time in West Germany Research institute

Assumed cut in working time

Estimated employment effect

Ifo (1983)

40 –38 hours

DIW (1983) IAB (1996)

40 –35 hours in 5 years Variant a: average cut in standard working time per year of 0·5% 1996–2005 Variant b: step-by-step reduction in standard working time to 34 hours per week 1996–2005

300,000–430,000 (private and public sector) 0·5–1 million (private sector) Average increase in employment of 0·3% per year Average additional rise in employment of 0·2–0·3% per year

Sources: Zwiener (1993), Klauder et al. (1996).

macro models are based as close to reality as possible, it is very advantageous to take account of the micro-level empirical data gathered from case studies and surveys. Macro simulations of the effects of working-time reductions were carried out in several European countries, both ex ante and ex post (cf., the examples from France and the Netherlands in Tables 7 and 8 and from Germany in Table 9). Görres (1984, p. 56), who provides a broadly based survey of the simulations carried out in Europe up to the beginning of the 1980s, obtained ‘a relative employment effect of over 40 per cent . . . as a (rough) average of all variations and studies.’ Since the data on pay increases can be assumed (or are known in ex post simulations), there are two large ‘black boxes’ for which assumptions have to be formulated,1 namely the productivity gains resulting from the working-time reductions and the evolution of operating hours. These assumptions will be all the more plausible the closer they are to reality, i.e., the more firmly they are based on empirical, microeconomic research (Zwiener, 1993; Cette and Taddei, 1994). The DIW, for example, assumes in its calculations that operating hours are neither shortened nor extended as a result of a cut in working time, and that the consequent productivity gain is one to two-thirds of the percentage reduction in working time.2 The French government’s macro simulations are based on the same assumption as far as operating hours are concerned but assume a productivity offset of about one-third. The micro-based estimations outlined earlier were very close to this hypothesis, an experience which encourages the government to expect an overall employment effect of some 700,000 jobs after the law is fully applied. The fourth methodological approach is based on so-called ‘decompositions’ (Zwiener, 1993). In this approach, the statistically ascertainable changes in the volume of work (total amount of hours worked in the economy as a whole or in individual sectors) are broken down into various components, e.g., overtime, part-time etc. The next stage is to calculate the extent to which the changes in actual working time are attributable to, respectively, productivity, changes in production and the reduction in contractual working time. In Germany, this method has been used by both the employers’ associations and the 1

Assumptions are not generally made about skill shortages. The assumptions on which the DIW simulation is based, and the various elements used to construct the model, have been the subject of detailed criticism in a study commissioned by the engineering industry’s employers’ association (Huber and Roth, 1989; cf., Zwiener’s reply 1993). The controversy cannot be examined in detail here, but it seems to us worth noting that the bone of contention is the level of the employment effects calculated by the DIW, not the fact of their existence. It is further argued that the positive employment effects could also have been achieved by means other than working-time reductions. 2

05 Bosch 209-243

30/01/01 9:36 am

Page 227


227

Figure 4. Growth, productivity, volume of work, employment and working time in West Germany, 1980–97. Source: Stille and Zwiener (1997).

trade unions. Again, the results obtained differed enormously, although in both cases the employment effects achieved were positive. The estimates produced by research institutes lay somewhere in between these two extremes. Thus, on the basis of the main indicators of economic development in West Germany for the period between 1983 and 1992 (Figure 4), the research institute of the German Federal Labour Office (IAB) concluded that ‘the interaction of these various factors (had also led) to a redistribution of the volume of work among a greater number of people’ (Spitznagel and Kohler, 1993, p. 4). By employing the rough rule of thumb that the effect of a cut in working time is distributed more or less evenly between employment and productivity, the combined employment effect of collectively agreed working-time reductions, part-time work and more flexible operating hours is estimated at one million employment relationships, which amounts to one-third of the growth in employment over the period. Although it has not been possible here to offer anything more than a brief outline of the methods used and the results obtained in empirical investigations into the employment effects of collective working-time reductions, two general conclusions can be drawn. First, all the approaches described have a great deal of methodological uncertainty attached to them. Precise results are not possible; the best that can be hoped for is a definition of the range within which the employment effects are likely to lie, based on assumptions that are as realistic as possible. And the extent to which those assumptions are realistic depends on micro-level studies of firms’ reactions to cuts in working time. Secondly, most empirical studies confirm that collective working-time reductions can be expected to have positive employment effects. However, the broad range of possible effects that can be derived from the various sets of assumptions on which the models are based reflects nothing other than the fact that ‘what matters is the measures put in place in the aftermath of a cut in working time, rather than the cut itself’ (Cette and Taddei, 1994, p. 91). These measures are not laws of nature, but the products of human choices! This is why, in our opinion, the most important thing is to agree on the kind of conditions that have to be created if the employment policy pursued is to be as successful as possible in creating jobs. The purpose of the

05 Bosch 209-243

30/01/01 9:36 am

228

Page 228


following survey of significant experiences with working-time reductions is to contribute to such an agreement. 4.2 Past experiences, and the conclusions to be drawn from them The most importance experiences drawn from the collective working-time reductions of the past 15 years relate to the following problem areas: the structuring of the relationship between compensatory pay increases and productivity gains the avoidance of shortages on the supply side of the labour market the articulation of working time, operating hours and work organisation job security in flexible working-time systems, and the action of the state. 4.2.1 Compensatory pay increases and productivity gains The working-time reductions implemented during this period did not generally lead to any increase in unit wage costs. During the period of the rapid reduction in working time in Germany, unit wage costs (in national currencies) even fell relative to some countries where working time was not cut (Table 10). One important reason for this was the fact that negotiations on working-time reductions were usually combined with negotiations on wage increases. In the course of these negotiations, the trade unions agreed to lower pay increases in exchange for the working-time reductions. In the German engineering industry, for example, some of the agreements on the step-by-step transition to the 35-hour week were linked with pay agreements that ran for periods of several years and provided for low increases. The main reason for putting an actual figure on the ‘compensatory’ element in the total package of working-time reduction and pay increase was that both parties to the negotiations needed such a figure to legitimate their respective positions (the trade unions had to demonstrate that they had obtained full wage compensation, while the employers’ associations were concerned that any wage increase should appear to be modest); in economic terms, however, this distinction was irrelevant. The most significant factor in the evolution of labour costs is the size of the overall package of working-time reduction and pay increase, and the ultimately decisive unit wage costs are a product of the relationship between the evolution of wages ensuing from the overall package and the increase in labour productivity. As a retrospective survey of developments in Germany shows, the long-term agreements clearly underestimated the expected rates of increase in productivity, so that in both the short and medium term the rates of increase in real wages were lower than the rates of increase in productivity. Thus, during the period of collective working-time reductions in Germany, Table 10. Unit wage costsa in national currencies 1980–91 (1980=100)

Nominal Real

Germany (W)

France

Great Britain

USA

Japan

124·9 91·1

170·7 89·8

198·8 102·1

160·5 99·6

112·5 93·4

a Nominal or real income per dependent employee, divided by gross value added per economically active person in the economy as a whole. Source: ifo (1996).

05 Bosch 209-243

30/01/01 9:36 am

Page 229


229

the balance of distribution between productivity gains and rises in real wage even shifted in favour of company profits. It remains an open question whether ‘the sustained shift in the balance of distribution could have been avoided, at least in part’ if there had been no reduction in working time, as Zwiener (1993, p. 99) surmises. It might equally well be speculated that the balance of distribution might have evolved even less favourably for dependent employees without the great pressure exerted by trade union movements calling for working-time reductions in the 1980s. However, one lesson that seems to us to be important for the future is that there is still scope for working-time reductions in collective bargaining policies guided by the principle of distributive neutrality. It is true that lower rates of productivity increase mean that the competition between pay and working-time policy has now intensified. For trade unions that maintain the need for further working-time reductions, lower rates of productivity have proved to be a dilemma which has driven trade union organisations and their membership in many European countries into a ‘wait and see’ position. Thus, reductions in standard hours, though still being advocated theoretically, are far from being given powerful political support at present. However, as experiences in Germany and, even more so, in France show, working-time reductions may be regarded as a much more attractive policy option as soon as the issue of job security comes into play. A survey conducted among French employees gives a striking example of this potential turnabout in attitudes. The initial minority in favour of a working-time reduction without pay compensation turned into a majority if jobs in their organisation were to be safeguarded or created (Table 11). This clearly demonstrates the decisive role of the political choice taken by the social actors. At any rate, the wage–time dilemma is most likely to be resolved, if at all, by the adoption of medium-term, step-by-step plans. Again, it is the recent experience in France which highlights this possibility. The above-mentioned analysis of the company agreements on the introduction of the 35-hour week, conducted by the French Ministry of Labour, revealed that about three-quarters of all internal agreements stipulated a wage freeze or just modest wage increases for an average of two years (Ministère de l’Emploi et de la Solidarité, 1999). Of course, a medium-term policy of this kind is a perilous balancing act, particularly for trade unions. Adoption of the principle of a distribution-neutral pay policy leads to the problem of both ‘too high’ and ‘too low’ pay increases. Moreover, low average wages are like lead weights encumbering the feet of trade unions seeking to push through cuts in Table 11. Opinions of full-time employees on working-time reductions with loss of pay (%) (France, 1995)a ‘Yes’ to Q1

Male Female All full-time employees

19·8 27·4 22·7

Yes’ to Q2 among those responding ‘no’ to Q1 38·3 41·3 39·4

‘Yes’ to Q1 or Q2

49·8 56·7 53·0

a Q1: Would you accept a working-time reduction for all employees in your organisation accompanied by a reduction of your annual salary? Q2: If the answer to Q1 is ‘no’, would you accept the working-time reduction accompanied by a reduction of your annual salary if this allowed to safeguard or increase the number of jobs in your organisation? Source: Cette and Gubian (1998).

05 Bosch 209-243

30/01/01 9:36 am

230

Page 230


Table 12. Family income distribution: percent of the median, mid-1980sa 10th percentile France (84) Germany (W) (84) The Netherlands (87) Sweden (87) UK (86) USA (86)

55·4 56·9 61·5 55·6 51·1 34·7

90th percentile 95th percentile 192·8 170·8 175·0 151·5 194·1 206·1

233·5 201·7 206·4 170·4 232·1 247·3

Distance ratio 90/10 3·48 3·00 2·85 2·72 3·80 5·94

a The entries in columns 1–3 are the percentage of family income at the decile of the median. Adjusted for family size. Source: Atkinson et al. (1994).

working time, since their members are too frightened of any loss of earnings. Collective working-time reductions are increasingly less likely to be accepted, particularly in situations in which income inequalities are widening. It is no coincidence that countries with relatively short average working times, such as Germany, Sweden and the Netherlands, have considerably more egalitarian incomes distributions than countries with long working times, such as Great Britain and the USA (Table 12). A neo-liberal policy of income differentiation considerably reduces the scope for the social partners to negotiate a redistribution of working time. Under conditions of low economic growth, the opportunities for a redistribution of work are likely to depend more on medium-term, tripartite agreements, with appropriate support from state budget policy. However, a policy of medium-term, step-by-step arrangements is also useful in the implementation of working-time reductions at plant level. Both sides need to be able to plan ahead with a degree of certainty; this applies to employees no less than to their employers. Carefully negotiated step-by-step plans have proved more effective in employment terms than shock therapies (which cannot in any case be put into practice in the foreseeable future for political reasons).1 A second important reason why the working-time reduction in Germany, the Netherlands and other countries went hand in hand with improvements in relative international competitiveness (measured in terms of real unit wage costs) was the additional productivity gains produced by the cuts in working time. These cuts frequently provided the stimulus for the reorganisation of work processes and norms; the flexibilisation measures introduced in conjunction with the cuts also created new options for firms. One clear example of this was the introduction of the 37·5-hour week in parts of the British engineering industry in the late 1980s and early 1990s. In the vast majority of internal agreements concluded at this time, firms were able for the first time to implement bell-to-bell working, i.e., to make the trade unions jointly responsible for the complete utilisation of the reduced volume of working time, so that employment effects were seldom generated (Blyton, 1995). Additional productivity effects can also be produced by making operating hours more flexible, which will be examined in the next section. 1 Norway provides one example of shock treatment. In 1986, standard contractual working time there was reduced in one stage from 40 hours to 37·5 hours per week, initially in the engineering industry and then throughout the economy. The reduction was accompanied neither by coordinated pay agreements nor by agreements on more flexible forms of working-time organisation. This imbalance probably contributed a great deal to the increase in the volume of overtime and inflationary pressures (Bosch, 1997).

05 Bosch 209-243

30/01/01 9:36 am

Page 231


231

Empirical experiences with the relationship between working-time reductions and labour costs have been summarised as follows by Cette and Taddei (1994, p. 45): Historically . . . all the compromises achieved have ultimately ended in the same financing mechanism: over the long term, the bill is always paid for by productivity gains, even if at the outset the negotiating partners have always been much exercised by the question of wage compensation, which has needlessly acquired almost mythical status.

4.2.2 Avoiding shortages on the supply side of the labour market Work cannot be redistributed unless there is a supply of sufficiently skilled workers in the labour market who are in a position to take up the hours of work that are ‘freed up’. If there are labour shortages, overtime will increase or output will fall; in neither case will there be any positive employment effects. Firms in Germany were generally able to deal with the working-time reductions of the 1980s without creating bottlenecks on the supply side of the labour market. The shortage of skilled workers feared by some did not actually occur, apart from a few isolated incidents. Even in the boom year of 1990, only 10% of firms indicated that their production plans would be hampered by labour shortages (Spitznagel and Kohler, 1993). This is also clear from the German statistics on overtime: the volume of overtime worked in the economy as a whole did not increase in the period of rapid working-time reductions, but fluctuated only slightly with the economic cycle. In the longer term, it has even declined (Kohler and Spitznagel, 1996). This is undoubtedly worthy of note in a period of growth accompanied by rapid cuts in standard working time. The most important reason for these developments was probably the German vocational training system and the fact that, prior to the period of working-time reductions, many companies had trained more skilled workers than they needed to meet their immediate requirements, whereas the inadequate supply of skilled workers in the British economy undoubtedly contributed significantly to the high share of workers with very long hours in the UK (Tables 13 and 14). Table 13. Long hours working in EU countries, 1996a

Austria Belgium Denmark Finland (1995) France Germany (1995) Greece (1995) Ireland (1995) Italy Luxembourg (1995) The Netherlands Portugal Spain Sweden (1995) UK (1995) EU 15 (1995)

Men

Women

5·8 5·7 13·3 5·2 14·5 8·8 20·0 20·4 14·6 7·2 2·1 28·8 3·6 8·9 43·0 17·8

2·2 2·1 4·5 2·7 5·9 2·8 12·1 5·7 5·9 3·8 0·4 13·3 1·8 3·9 10·9 5·9

a Employees with 45+ hours ‘usually worked’ per week in percentages of total employees. Source: Eurostat special tabulation.

05 Bosch 209-243

30/01/01 9:36 am

232

Page 232


Table 14. Vocational training in Great Britain, France and Germanya Great Britain (1989) Higher education qualification Technician Skilled worker No vocational qualification

11 17 18 64

France (1988) 17 17 33 53

Germany (1988) 11 17 56 26

a Distribution of vocational qualifications in the economically active population, %. Source: OECD (1995, p. 53).

Skill levels are one of the key strategic issues for any future reductions in working time. The more manufacturing and services become knowledge based and the greater the demands are on employees’ skills, the greater the risk is that working-time reductions will fail because of an inadequate supply of skilled labour. If firms also have to pick up the bill for the necessary investment in training, then fixed costs per employee will rise and it will become simply impossible to agree working-time reductions at plant level. Any employer who invests large sums in his company’s ‘intellectual plant’ is just as concerned to amortise this investment quickly, and consequently to extend ‘operating hours’ as much as possible, as he is in the case of machinery.1 4.2.3 Working time, operating hours and work organisation Significant reductions in working time generally have to be accompanied by changes in work organisation if neither operating hours nor opening hours are to be cut as well. In every European country in which working time has been significantly reduced, the reductions have increased the scope for the flexibilisation of working time. What cannot be ignored is the close link between the reduction and flexibilisation of working time. Each of the agreements concluded in the German engineering industry on the road to the 35-hour week further increased the scope for differentiated and flexible working times. In the Netherlands, recently introduced legislation on working time gives the negotiating parties a great deal of scope for arranging working time as they see fit, and implicitly encourages the negotiation of trade-offs between shorter working time and more flexible operating hours; such agreements were concluded shortly afterwards in some industries (Plantenga and Dur, 1998). These new opportunities for flexibilisation have also been exploited at plant level, albeit with a certain time lag. In Germany, for example, weekly operating hours rose between 1984 and 1996 from 60·6 to 71·8 hours (Bauer et al., 1998, p. 58).2 Case studies that we carried out in the motor industry in the early 1990s showed that short working times are 1 Obviously this analogy is to some extent an inappropriate one, since human intelligence, unlike a machine, is a ‘renewable resource’. Continued investment in knowledge can lead to ‘utilisation times for intellectual capital’ of many decades, provided it is not worn out through excessive use in the short term. And yet is it realistic to expect firms, on their own initiative and through a greater understanding of what is required, to make such a long-term and ‘sustainable’ investment in the training of their workforce and at the same time agree to shorter working times? It is at this point that the limits of a purely firm-based approach to developing strategic compromise become apparent. Only if investment in further training is seen as a responsibility for the State as well can working-time reductions be prevented from grinding to a halt in the cul-de-sac of fixed costs. 2 The measurement of operating hours is beset by considerable methodological problems (Bosworth and Cette,1995); in some international comparisons of operating hours, the survey and calculation methods used for Germany differed from those used in the comparator countries (Bosch and Stille, 1995).

05 Bosch 209-243

30/01/01 9:36 am

Page 233


233

associated in many cases with long operating hours (Lehndorff and Bosch, 1993). At the same time, it became clear that short working times can encourage greater flexibility in the organisation of operating hours and the development of arrangements tailor-made to specific operational requirements. Thus, when demand increases in car factories, the changeover from the traditional two-shift system to three-shift operation (i.e., to 120 operating hours per week) is a major leap that can give rise to cost problems (e.g., maintenance requirements can restrict opportunities for producing ‘round the clock’). It often makes more sense to adopt shift systems that facilitate compromise solutions (e.g., weekly operating hours of around 100 hours) and at the same time allow firms to react more quickly to fluctuations in demand. Developments at VW, where standard working time was reduced from 35 to 28·8 hours per week in 1994 in order to avoid 30,000 redundancies, underline this argument. In the years that followed the agreement, an important side effect became apparent. The drastic cut in working time meant that the plants were forced to develop new shift systems. Each VW plant now has a multiplicity of different working-time systems, each one adapted to local conditions. Even contractual working time now varies from plant to plant and can be changed over time (Promberger et al., 1997). In some cases, operating hours are now longer than they were under the two-shift system. If necessary, plants can operate three or four short shifts a day and, as a result, annual operating hours for individual models can be extended from the previous level of 3,700 hours to up to 5,300 hours. Thus, working-time reductions create the necessary scope and incentives for an active policy on operating hours, for the management of working time at firm level, that can lead to considerable increases in efficiency. It is no longer sufficient simply to react mechanically by adding a second, third, fourth or even, in fully continuous operation, fifth shift; rather, firms have to make full use of a wide range of options for the differentiated and variable decoupling of individual working time and operating hours. In a country like Great Britain, with long contractual working times and a deeply rooted overtime culture, most firms are lazy in their thinking about the organisation of working time, believing that nothing needs to be changed in the long-established shift systems and the traditional response to fluctuations in demand, namely the recourse to overtime. These attitudes allow an important source of productivity gains to go untapped, and this is reflected ultimately in the evolution of productivity over the longer term. Companies in countries such as Germany, on the other hand, have been forced by the cut in working time to give serious consideration to ways in which shorter working times can be combined with possibly even longer, but in any event more flexible operating hours. It is no coincidence that German car plants have the greatest diversity of working-time systems in the entire Western European motor industry. Short working times create an impetus for rationalisation, as is indicated by a comparison of the diffusion and dynamic of flexible forms of working time between German and British companies in particular (Table 15). Table 15 also draws attention to other countries with a stronger working-time dynamic. One of these is Finland, where in recent years a number of companies have, with assistance from government advice services, changed to a 26-hour shift system. This has resulted both in considerable productivity gains and increased employment (Peltola, 1998). Similar experiments have been conducted in the Netherlands since the 1980s; in the so-called ‘compressed working week’, individual daily working time is extended but concentrated into a four-day working week, while the plant or establishment works a fiveday week with longer daily operating hours. As a 1992 survey conducted by the labour market authorities showed, working time was cut in 75% of participating companies

05 Bosch 209-243

30/01/01 9:36 am

234

Page 234

Gerhard Bosch and Steffen Lehndorff Table 15. Percentage of firms that have changed their use of flexible forms of working time in the past three years

Denmark Finland France Germany (W) Ireland Italy The Netherlands Norway Sweden UK

Increased

Unchanged

Reduced

Not used

16 62 19 55 25 32 43 23 35 30

53 24 46 27 27 22 38 59 52 31

1 0 1 1 1 0 0 1 1 1

25 12 24 14 31 36 14 10 10 32

Source: Cranfield School of Management (1995).

(particularly in those in which the 38-hour week had not been introduced). Sixty-six per cent of the companies reported employment effects, which in some cases were classified as ‘considerable’ because of the longer operating hours (ATOS, 1997). It is not a hard-and-fast rule that small firms operating a one-shift system find it more difficult to utilise these advantages and to turn the need to adapt to shorter working times to good account by changing the organisation of operating hours;1 rather, it is a reflection of the lack of cooperative and consultative networks on working-time policy. One-shift operation also offers a range of opportunities for organising working time in order to adjust operating hours to demand. The experiences of firms in all size categories show how closely the organisation of working time is linked to the organisation of work and of the firm as a whole. This connection can be seen most clearly in those attempts at far-reaching reform in which employees are given responsibility for controlling production. Depending on the order situation, they fix a longer or shorter working time for themselves. At the same time, there is some scope for individual agreements between employees. The way in which individual time accounts are balanced (e.g., through substitutions when individual employees take days off or shifts of variable length) is one element in the group’s right of disposal. In other words, it is not simply a question of organising the collective fluctuations in working time over the course of the year in accordance with fluctuations in orders, but at the same time taking account of individual working-time preferences and variations. In this way, these firms manage to adjust the volume of time worked very closely to fluctuations in order volumes. Cuts in working time encourage innovations of this kind, which lead to wide-ranging reforms of company structures (cf., examples from recent case studies in Germany, Table 16). They create the possibility of positive interactions between productivity gains, growth and employment, thereby broadening the scope for establishing compromises. The precondition for the existence of such a dynamic is that the social partners and firms learn how to use working-time policy as an instrument for change (Lehndorff, 1999). 1 Some studies have ascertained that firms’ reactions to working-time reductions differ according to size. Of the 15% of firms in the Netherlands that reported new recruitment immediately after a collective workingtime reduction (cf., above, Table 6), 14% had fewer than ten employees, 26% between ten and 99 employees and 52% more than 100 employees (ATOS, 1997).

05 Bosch 209-243

30/01/01 9:36 am

Page 235


235

4.2.4 Job security in flexible working-time systems In standardised working-time systems, working time was transparent and easily monitored. In Western Europe (except in Great Britain), works councils, trade union representatives or the State restricted overtime by fixing statutory upper limits and ensured that the hours actually worked did not deviate too much from agreed working times. In the new, more flexible working-time systems, it is theoretically possible in an extreme case for each employee to have his or her own individual working time. At the lower end of the scale (in the retail food trade, for example), there have been moves towards ‘on-call work’, which threaten to blur the boundaries between working time and employees’ own time. At the upper end of the scale (overworked software engineers, for example), these boundaries are being made even more fluid by demands for ‘total commitment’, with employers requiring employees to place their individual abilities fully at the firm’s disposal, without any time restrictions. Thus, in Germany, for example, working time for high-skill employees has risen in recent years, against the general trend. In 1996, average working time for high-skill employees, at 46·3 hours per week, was 1 hour longer than in 1984, although contractual working time for this category of workers actually fell by 2·5 hours per week (Wagner, 1998). This trend, which we characterise as the ‘informalisation of working time’ is becoming increasingly widespread as working time becomes more flexible, particularly in white-collar jobs. Since the incidence of flexible working hours is soaring, this ‘informalisation’ may prove to be the harbinger of a substantial rise in working hours, particularly among skilled staff. This in turn may undermine the effectiveness of any regulatory efforts in this area, even though the great majority of employees in continental Europe are not likely in the near future to follow the route of the ‘overworked American’ (Schor, 1991). Thus, if the implementation of working-time reductions is to be as employment-effective as possible, ways have to be found of dealing with the new demands being made of regulatory systems and, in particular, of the collective negotiation of working time. The first of these new demands is that flexibly distributed working time has to be recorded and paid for. Only work that is recorded and paid for can be redistributed. Thus, flexibly distributed working time has to go hand in hand with the introduction of individual working-time accounts. The second demand is that rules should be established to ensure that employees are able to achieve their contractual working times as an average value spread over a moderate time frame. In Germany at the moment, such rules are currently being formulated and tested in many company agreements between trade unions or works councils on the one hand and employers on the other. The main issues at stake here are the upper limits for credit balances on working-time accounts, the transparency of these accounts, the procedural rules to be applied if the maximum permissible credit balances are exceeded and, last but not least, the conclusion of agreements that take account in one way or another of the link between working time, performance and manning levels (Lindecke and Lehndorff, 1998).1 4.2.5 State support for collective working-time policy The state can subsidise collective working-time reductions and thereby encourage or support the efforts of the social partners at industry and plant level. In Belgium and, even more so, in France (Freyssinet, 1998), a great deal of experience has been accumulated with the promotion of plant-level agreements on safeguarding jobs. Since 1996, there has 1 This can be achieved, for example, by agreeing that negotiations on new recruitment have to be initiated as soon as the balance on the working-time accounts in certain departments reaches a predetermined level.

Autonomous organisation; agreement in groups

Quality Delivery dates

Control teams

Control Quality-management Printing – Flexitime machine (personal) has manufacturer priority over bandwith model (collective) Working time regulated by employee Manufacturer Job handling Variable working of educational times aids Storekeeping

Holiday planning Medical Planning equipment manufacturer

Informal consultation

Bandwith model: ±100 h in addition Unlimited Plus hours lapse, minus hours deducted from pay

Works council rights

Right to see working time account Discussion about level in account

Works council initiative

Right to view red and yellow accounts are reported automatically

Application for assistance

when limit is reached (140 h): Discussion about personnelmatching measures

Right to see working time account

When plus hours reduced Right to see working to a limited extent: time account new jobs

Working time account and personnel allocation

When 120 h is When 2/3 of cost centre reached: discussion capacity: consultation as between work to personnel measures council, management and employee

Talk with employee

Flexitime: ±40 h Plus lapses, minus is deducted (Theory; Practice but plus is paid for)

±150

±200

Working time Measures when account bandwith the limit is (h)a reached

30/01/01 9:36 am

Car Division of work manufacturer

Group competences Working time empowerment of employees

236

Table 16. Working time, work organisation, employment

05 Bosch 209-243 Page 236


Work preparation

Automobile sub-supplier

Source: Lindecke (1998).

Quality development Qualification Working time and holiday

Variable working time

Teams control Groups control working time ±50 h not more than 20 h per month

Plus lapses, minus hours must be worked

Variable working ‘Traffic light S. traffic light model time model’; red: >±25 only by way of exception and temporarily Target: service time

New jobs as soon as more than 6 months more than collectively agreed working time accrue

When red zone: consultation as to measures for work organisation and personnel planning

Right to see

Automatic information when system in ‘red zone’

Right to see working time accounts.

30/01/01 9:36 am

Planning

Job processing

Insurance

05 Bosch 209-243 Page 237

Working-time reduction and employment 237

05 Bosch 209-243

30/01/01 9:36 am

238

Page 238


been a significant increase in France in internal agreements on working-time reductions as a result of new legislation (loi Robien) that allowed for subsidies in the form of lower employers’ social security contributions for firms with job protection or creation agreements. The new working-time legislation introduced by the Jospin government also offers wage cost subsidies to all firms that introduce the 35-hour week by way of internal agreement. Such subsidies make it easier for companies to carry out the reorganisation that is often associated with working-time reductions and help avoid, to a large extent, loss of income on the part of the employees. Before the introduction of the statutory 35-hour week at the beginning of 2000,1 in the course of a preparatory phase, numerous collective agreements on the 35-hour week were triggered by these government subsidies that by the end of 1999 covered about one-quarter of all full-time employees in the private sector of the French economy. In the short term, the new legislation will place a considerable burden on government finances. In the medium term, however, savings on transfer payments to the unemployed should enable the new arrangement to be self-financing (Boulin and Cette, 1999). No investigation has yet been conducted into the extent to which this self-financing effect is likely to materialise. In Germany, the working-time agreement at Volkswagen was used as a basis for calculating the effects of such measures in relieving some of the burden on the public purse (Meinhardt et al., 1993). According to these calculations, the state lost tax receipts because of the reduction in earnings among VW employees, but these losses were considerably outweighed by savings on unemployment benefit. The net effect of a 20% reduction in working time and pay for 100,000 workers—compared with the alternative of mass redundancies —was a saving for the public purse of between 200 and 350 million DM. Thus a policy of subsidising working-time reductions would to a large extent be self-financing. Thus, the employment effectiveness of working-time reductions can be considerably enhanced if the state uses its economic and political resources to support the policies adopted by the social partners. If working-time reductions agreed at plant or firm level could be subsidised for a fixed period, firms would be helped to make the organisational changes that are often associated with working-time reductions, and income losses for employees could be mitigated to some extent. State support could also be used advantageously to provide financial support for career breaks, to look after children, for example, or to undertake further training (on experiences in Denmark, see Madsen, 1998). At this point, our earlier observations on the importance of training costs for future working-time reductions have come full circle. 5. Some conclusions on the implementation of working-time reductions Those who have become so preoccupied with accumulating the means of a good life that they have forgotten that the end is existent may argue that men should work so as to secure the maximum product. There is nothing in economic science which supports them. The relative values which men assign to leisure and the results of production determine indeed the phenomena we have to analyse, but to pronounce upon the validity of these valuations as such is completely outside our province. All we can do is to attempt to exhibit clearly what consequences follow from one choice or another. (Robbins, 1929, p. 39). 1 The French government’s legal initiative will by no means prevent companies from making their employees work more than 35 working hours. In fact, the upper legal limit for working time is 46 hours per week as an average over 3 months. However, every hour worked in excess of 35 per week or an annualised total of 1,600 attracts overtime bonuses. Moreover, companies that conclude an agreement with trade unions or workforce representatives on the organisation of the 35-hour week benefit from substantial government subsidies.

05 Bosch 209-243

30/01/01 9:36 am

Page 239


239

We have been able to show that, in major industrialised countries over the last 120 years, there has been a nine to tenfold increase in real incomes and that working time has been cut almost by half. Productivity gains have been so high that it has been possible to distribute the increased prosperity in the form of both higher wages and shorter working times. The working-time reductions have also provided the impetus for new, more intensive forms of work organisation and utilisation of capital stock, and have even been an independent source of productivity gains. From a long-term perspective, it seems self-evident that working-time reductions have been a means of distributing the fruits of increased productivity. However, this view ignores the fact that, in the past, working-time reductions were frequently the subject of violent disputes over distribution. In the short term, these disputes cannot be ignored. The question of whether working-time reductions can be used as an instrument for reducing current levels of unemployment is being debated equally hotly. Depending on the assumptions on which they are based, theoretical models can be used to devise sequences of effects that show collective working-time reductions (and this is the form on which we have concentrated here) to be either an effective or ineffective instrument of employment policy. Such analyses are based on very different sets of assumptions about the circumstances under which cuts in working time might be put into practice. A priori, therefore, the employment effects of working-time reductions cannot be predetermined. The decisive factor in determining any such effects is not just whether the cuts are made but also, and more particularly, how they are put into practice. In order to investigate the implementation of working-time reductions in greater detail, we have examined the findings of studies of the employment effects of collective workingtime reductions and of the actual conditions under which such reductions have been put into practice in Western Europe over the past 20 years. Although they are based on a wide range of different methodologies, virtually all such studies show positive employment effects. However, some of them also refer to cases in which cuts in working time have led to increased overtime and inflationary pressures caused by excessive pay increases, with consequent negative effects on employment. Regrettably, the conditions under which the cuts in working time were introduced and implemented were not in many cases an explicit object of analysis; nevertheless, certain conclusions can be drawn from these studies about the conditions likely to generate positive employment effects. They can be summarised as follows. 1. In order to avoid a rise in unit wage costs, it is advisable to negotiate the wage compensation for working-time reductions and the increase in hourly rates as part of an overall package, possibly one that will remain in force for a lengthy period. In this way, cuts in working time and wage increases can be implemented simultaneously, as they were in Germany and the Netherlands, without causing a rise in real unit wage costs, which are particularly important in determining international competitiveness. 2. Large working-time reductions now have to be accompanied by reorganisations of working time, which make it easier for firms to extend opening and operating hours and to adjust them to demand more quickly and at lower cost. If working time falls considerably below the 40-hour limit, the old organisational paradigms based on the 8-hour day and the 40-hour week are called into question at the same time. The productivity effects of working-time reductions will in future depend increasingly on the development of work organisation. The state and the social partners can reduce the learning costs incurred by firms seeking to modernise the organisation of work and working

05 Bosch 209-243

30/01/01 9:36 am

240

Page 240


time by encouraging exchanges of information on actual experiences with new workingtime systems. 3. If working-time reductions are to have positive employment effects, ways have to be found of dealing with the new demands being made of regulatory systems and, in particular, of the collective negotiation of working time. What is required, in essence, is that individual employees should be given opportunities to influence their own working time and that these opportunities should be guaranteed by collective agreements or regulations. Even a ‘negotiated flexibility’ of this kind has to be linked as closely as possible to a thoroughgoing change in company structures and work organisations. 4. Only in a functionally flexible labour market, in which there is also an adequate supply of unemployed skilled workers, will working-time reductions not lead to shortages of skilled labour and overtime. These potential difficulties can be mitigated by an active, publicly funded training policy, which relieves firms of the burden of training costs, thereby preventing any increase in firms’ fixed labour costs and at the same time lowering barriers to recruitment. 5. One factor that works in favour of a policy of work redistribution in Germany (compared with the USA, for example) is the fact that social security contributions for most employees are paid in proportion to wages. However, rising demands on employees’ skill levels can give rise to a new ‘fixed cost trap’. The State can provide effective support for the working-time policy adopted by the social partners by financing further training measures, for example by funding paid career breaks along the lines of the Scandinavian model. These conditions are directed, on the one hand, at the purely monetary aspects of working-time reductions, that is wage compensation and the reduction of the burden of fixed labour costs. On the other hand, they take account of the fact that working time is also a ‘real quantity’, since differences in skills mean that workers are not a homogeneous good, and there are close links between length of working time and the organisation of work at plant level. Thus, hours worked must first be made divisible through training policy and the development of new forms of work organisation. To date, research by economists on working time has concentrated too much on the pros and cons of working-time reductions and tended to neglect analysis of the conditions that are of great importance for a successful policy on working time, which a more rational debate on this controversial topic might help to resolve. There is some lost ground to be made up here. From a more clearly differentiated point of view, it becomes evident that working-time reductions are not all alike. Moreover, a potentially effective instrument of employment policy can be put to good or bad use. Bibliography Atkinson, A. B., Rainwater, L. and Smeeding, T. 1994. Income Distribution in OECD Countries. The Evidence from the Luxembourg Income Data (LIS). Paris, OECD ATOS Beleidsadvies en -onderzoek bv 1997. Reduction of working hours in the Netherlands 1988–1995. Study contract concerning company policies with regard to the reduction of working time. Amsterdam (ms) Bauer, F., Bosch, G., Bundesmann-Jansen, J., Groß, H., Stille, F. and Wagner, A. 1998. Betriebszeiten 1996. Ergebnisse einer repräsentativen Betriebsbefragung zu Betriebs- und Arbeitszeiten im verarbeitenden Gewerbe, Hrsg. vom Ministerium für Arbeit, Soziales und Stadtentwicklung, Kultur und Sport des Landes Nordrhein-Westfalen, Düsseldorf Björklund, A. and Freeman, R. B. 1995. ‘Generating Equality and Eliminating Poverty—The

05 Bosch 209-243

30/01/01 9:36 am

Page 241


241

Swedish Way’. Stockholm: NBER/SNS Project ‘Reforming the Welfare State’, Occasional Paper No. 60, Stockholm Blyton, P. 1995. United Kingdom: the case of the metal manufacturing industry, pp. 83–101 in OECD (eds), Flexible Working Time. Collective Bargaining and Government Intervention, Paris, OECD Bosch, G. 1989. Wettlauf rund um die Uhr? Betriebs- und Arbeitszeiten in Europa. Bonn, Dietz Bosch, G. 1997. Flexibility in the Norwegian labour market in a comparative perspective, pp. 211–47 in Dolvik, J. E. and Steen, A. H. (eds.), Making Solidarity Work? The Norwegian Labour Market in Transition, Oslo Bosch, G. and Stille, F. 1995. Duration of utilisation of plant and machinery in Germany, pp. 177– 200 in Anxo, D., Bosch, G., Bosworth, D., Cette, G., Sterner, T. and Taddei, D. (eds), Work Patterns and Capital Utilisation—An International Comparison, Deventer, Kluwer (French edition: Utilisation des équipements et horaires de travail. Comparaison internationale, Paris, INSEE) Bosch, G., Engelhardt, N., Hermann, K., Kurzscheif, I. and Seifert, H. 1988. Arbeitszeitverkürzung im Betrieb. Die Umsetzung der 38,5-Stundenwoche in der Metall-, Druck- und Holzindustrie sowie im Einzelhandel, Köln, Bund Bosch, G., Dawkins, P. and Michon, F. (eds) 1994. Times Are Changing. Working Time in 14 Industrialised Countries. Geneva Bosworth, D. and Cette, G. 1995. Capital operating time: Measurement issues, pp. 89–120 in Anxo, D., Bosch, G., Bosworth, D., Cette, G., Sterner, T. and Taddei, D. (eds), Work Patterns and Capital Utilisation—An International Comparison, Deventer, Kluwer (French edition: Utilisation des équipements et horaires de travail. Comparaison internationale, Paris, INSEE) Boulin, J. Y. and Cette, G. 1999. Temps de travail et emploi: entre production réglementaire et innovations dans l’entreprise. Contribution au 6ème Séminaire International sur le temps de travail. Institut Arbeit und Technik, Gelsenkirchen Brems, H. 1989. Hours and employment. Jahrbuch für Nationalökonomie und Statistik, vol. 206, no. 4–5, 307–14 Cette, G. and Gubian, A. 1998. Les évaluations des effets sur l’emploi d’une réduction de la durée du travail: quelques remarques, Travail et Emploi, no. 74, 91–109 Cette, G. and Taddei, D. 1994. Temps de travail—modes d’emploi. Vers la semaine de quatre jours? Paris, Librairie Générale Française Cranfield School of Management 1995. Price Waterhouse Cranfield Project 1995 Survey Results, Cranfield School of Management, Centre for European Human Resource Management Cutler, D. M. and Madrian, B. C. 1996. ‘Labor Market Response to Rising Health Insurance Costs: Evidence on Hours Worked’, National Bureau of Economic Research, Working Paper 5525, Cambridge, MA Cueva, S.1994. Emploi, durée effective et durée légale du travail, Paris, GREFI, Ministère de l’Industrie (mimeo) de Lange, W. 1989. Configuratie van arbeid, Zutphen Deutschmann, C. 1985. Der Weg zum Normalarbeitstag. Die Entwicklung der Arbeitszeiten der deutschen Industrie bis 1918, Frankfurt, New York, Campus Drèze, J. H. 1986. ‘Work-Sharing: Why? How? How not . . . . ’, Centre for European Policy Studies, CEPS Papers No. 27, Brussels European Industrial Relations Review 1999, no. 308, pp. 14–19 Eurostat 1995. Die Arbeitszeit in der Europäischen Union. Schätzung der tatsächlichen Jahresarbeitszeit 1983–1993, Statistik kurzgefaßt, Heft 4, Luxemburg Foss, M. 1981. Long-run changes in the workweek of fixed capital, Papers and Proceedings of the Annual Meeting of the American Economic Association, Menasha, pp. 58–63, American Economic Association Foss, M. 1984. Changing Utilization of Fixed Capital. An Element in Long-Term Growth, Washington/London, American Enterprise Institute for Public Policy Research Freyssinet, J. 1998. France: a recurrent aim, repeated near-failures and a new law, Transfer, European Review of Labour and Research, vol. 4, no. 4, 641–56 Görres, P. A. 1984. Die Umverteilung der Arbeit. Beschäftigungs-, Wachstums- und Wohlfahrtseffekte einer Arbeitszeitverkürzung, Frankfurt/New York, Campus Habakkuk, H. J. 1967. American and British Technology in the Nineteenth Century. The Search for Labour-saving Inventions, Cambridge

05 Bosch 209-243

30/01/01 9:36 am

242

Page 242


Hicks, J. 1946. Value and Capital, 2nd edn, Oxford Huber, P. and Roth, J. 1989. Mehr Beschäftigung durch kürzere Arbeitszeit? Eine kritische Auseinandersetzung mit ökonometrischen Schätzungen zu den Wirkungen der Arbeitszeitverkürzung, Reutlingen Hunt, J. 1996. ‘Has Work-Sharing Worked in Germany?’ Yale university (ms) ifo 1996 (Köddermann, R.). Sind Löhne und Steuern zu hoch? Bemerkungen zur Standortdiskussion in Deutschland. ifo-Schnelldienst, vol. 20, 6–15 Keynes, J. M. 1945 [1980]. Collected Writings, edited by D. Moggridge, vol. 27, Cambridge Klauder, W., Schnur, P. and Zika, G. 1996. ‘Wege zu mehr Beschäftigung. Simulationsrechnungen bis zum Jahr 2005 am Beispiel Westdeutschland’, IAB Werkstattbericht no. 5, Nürnberg Kohler, H. and Spitznagel, E. 1996. ‘Überstunden in Deutschland—Eine empirische Analyse’, IAB Werkstattbericht No. 4, Nürnberg, Institut für Arbeitsmarkt- und Berufsforschung der Bundesanstalt für Arbeit König, H. and Pohlmeier, W. 1987. Arbeitszeit und Beschäftigung: eine ökonometrische Studie, in Bombach, G. (ed.), Arbeitsmärkte und Beschäftigung—Fakten, Analysen, Perspektiven, Tübingen, Mohr Lehndorff, S. 1995. ‘Reducing Working Time, Saving Jobs? The Example of the Automotive Industry’, Study commissioned by DG V of the European Commission. Gelsenkirchen (ms) Lehndorff, S. (ed.) 1999. New Working Time Systems, Work Organisation and Re-distribution of Work, Final report for the European Commission, Gelsenkirchen, Graue Reihe des Instituts Arbeit und Technik 1999-03 Lehndorff, S. and Bosch, G. 1993. Autos bauen zu jeder Zeit? Arbeits- und Betriebszeiten in der europäischen und japanischen Automobilindustrie, Berlin, Edition Sigma Lindecke, C. 1998. Neue Arbeitszeitsysteme, Arbeitsorganisation und Arbeitsumverteilung: Deutschland, Forschungsbericht an die EU DG V, Gelsenkirchen, Institut Arbeit und Technik Lindecke, C. and Lehndorff, S. 1998. ‘Current Trends in the Flexible Organization of Working Time in Germany: A Survey of some Recent Internal Agreements in the Engineering Industry’, Sectoral Activities Programme Working Papers, SAP2.70/WP,124, Geneva, ILO Maddison, A. 1995. L’Économie Mondiale 1820–1992. Analyse et Statistiques, Paris, OECD Madsen, P. K. 1998. Working time policy and paid leave arrangements: the Danish experience in the 1990s, Transfer, European Review of Labour and Research, vol. 4, no. 4, 692–714 Meinhardt, V., Stille, F. and Zwiener, R. 1993. Weitere Arbeitszeitverkürzungen erforderlich. Zum Stellenwert des VW-Modells, Wirtschaftsdienst, vol. 12, 639–44 Ministère de l’Emploi et de la Solidarité 1999. Les enseignements des accords sur la réduction du temps de travail, Paris, La Documentation Française Neifer-Dichmann E. 1991. Working time reduction in the former Republic of Germany: a dead end for employment policy, International Labour Review, vol. 130, no. 4 OECD 1995. Economic Surveys—United Kingdom, Paris, OECD OECD 1998. Employment Outlook, Paris, OECD Peltola, P. 1998. Working time reduction in Finland, Transfer, European Review of Labour and Research, vol. 4, no. 4, 729–46 Perloff, J. M. and Wachter, M. L. 1978. Work sharing, unemployment and the rate of economic growth, Work Time and Employment, NCMP Special Report, no. 28, 87–122, Washington, DC Plantenga, J. and Dur, R. 1998. Working time reduction in the Netherlands: past developements and future prospects, Transfer, European Review of Labour and Research, vol. 4, no. 4, 678–91 Promberger, M., Rosdücher, J., Seifert, H. and Trinczek, R. 1997. Weniger Geld, kürzere Arbeitszeit, sichere Jobs? Soziale und ökonomische Folgen beschäftigungssichernder Arbeitszeitverkürzungen, Berlin, Edition Sigma Robbins, L. 1929. The economic effects of variations in hours of labour, Economic Journal, 39, 25–40 Schor, J. B. 1991. The Overworked American. The Unexpected Decline of Leisure, New York, Basic Books Seifert, H. 1991. Employment effects of working time reductions in the former Federal Republic of Germany, International Labour Review, vol. 130, no. 4, 495–510 Semmer N., Baillod, J. and BogenstätterY. 1995. Kürzere Arbeitszeiten führen zu höherer Produktivität, Managment Zeitschrift, vol. 64, no. 6 Spitznagel, E. and Kohler, H. 1993. ‘Kann Arbeitszeitverlängerung zur Lösung der Arbeitsmarktprobleme beitragen?’ Nürnberg, IAB Werkstattbericht No. 14

05 Bosch 209-243

30/01/01 9:36 am

Page 243


243

Stille, F. and Zwiener, R. 1997. Arbeits- und Betriebszeiten in Deutschland: Analysen zu Wettbewerbsfähigkeit und Beschäftigung, Berlin, DIW-Sonderheft Taylor F. W. 1947. Scientific Management, New York, London, Routledge van Deelen, H. 1987. Kostenoptimale Arbeits- und Betriebszeiten. Zusammenhänge, Methoden und Anwendungsbeispiele, Berlin, Schmidt Wagner, A. 1998. Working times of high-level white-collar workers in Germany. An evaluation of the SOEP. Paper presented at the International Working Party on Labour Market Segmentation 20th Conference, 9–14 July, Arco, Italy Whitley, J. D. and Wilson, R. A. 1986. The impact on employment of a reduction in the length of the working week, Cambridge Journal of Economics, vol. 10, 43–59 Zwiener, R. 1993. Zu den Effekten der Arbeitszeitverkürzung in den achtziger Jahren, pp. 91–103 in Hampe, P. (ed.), Zwischenbilanz der Arbeitszeitverkürzung,. München, v. Hase & Koehler

05 Bosch 209-243

30/01/01 9:36 am

Page 244