Abstract
Using data from the IAB Establishment Panel, 1995–2000, we investigate between-plant variations in productivity. The study compares technical efficiencies between plants which work overtime (overtime plants) and plants which do not work overtime (standard-time plants), where technical efficiency measures the gap between feasible output and actual output for a given input combination. A fixed effects approach is applied, which does neither rely on any distributional assumptions of the inefficiencies, nor on the independence between the regressors and inefficiencies. For both, models with time-invariant and time-varying inefficiencies, we do not find evidence that the two plant-types differ in their technical efficiency.
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First version received: May 2002 / Final version received: August 2004
The comments by Martyn Andrews and Bob Hart are gratefully acknowledged. The article has also benefited from the comments of two anonymous referees.
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Schank, T. Are overtime plants more efficient than standard-time plants? A stochastic production frontier analysis using the IAB Establishment Panel. Empirical Economics 30, 693–710 (2005). https://doi.org/10.1007/s00181-005-0257-5
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DOI: https://doi.org/10.1007/s00181-005-0257-5