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Empirica

, Volume 35, Issue 3, pp 255–266 | Cite as

Extending working hours: why not work 42 h rather than 38?—a CGE analysis for Germany

  • Klaus Conrad
  • Henrike Koschel
  • Andreas LöschelEmail author
Original Paper
  • 114 Downloads

Abstract

Faced with a record level of unemployment, the present debate in Germany is to extend the weekly hours of work. In this paper the employment effects of an economy-wide increase in weekly hours are quantified on the basis of a computable general equilibrium model for different specifications of the wage setting rule and the use of additional policy-induced public income. The simulation results back the argument of the opponents of longer working time that not more jobs will be created. However, when the higher tax revenues from GDP growth are used to reduce social security contributions, then the claim of the proponents that more jobs will be created can be supported.

Keywords

Unemployment Labour market rigidities Longer working hours Computable general equilibrium modelling 

Notes

Acknowledgement

We are grateful for valuable comments of a referee made on an earlier version of this paper.

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Copyright information

© Springer Science+Business Media, LLC. 2008

Authors and Affiliations

  • Klaus Conrad
    • 1
  • Henrike Koschel
    • 2
  • Andreas Löschel
    • 2
    Email author
  1. 1.Department of EconomicsUniversity of MannheimMannheimGermany
  2. 2.Centre for European Economic Research (ZEW)MannheimGermany

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