Working time and wages represent two elementary components of economic welfare. Yet, in spite of both having witnessed signi
cant changes during recent decades, economists have expended far greater efforts on probing changes in the structure of wages than on exploring trends in the composition of working hours. Using data from the German Socio-Economic Panel for the period from 1984 to 2009, my thesis sets out to do three things:
firstly, to document recent changes in the distribution of hours; secondly, to describe the related trends in part-time employment; and thirdly, to elaborate on the interrelation between hours, wages, and incomes. My results show a protracted decline of average hours that materialises next to a growing diversication of working time between and within different groups of the labour market. I find a secular expansion of part-time work that has accomodated a surge of female
employment, and appealed to young and low-skilled workers alike. Due to a persistently high share of full-time work among men, male income inequality is extensively shaped by changes in the distribution of wages. Among women, where part-time arrangements are common, both hours and wages exert a commensurate impact on the distribution of incomes.
Restricting attention to full-time workers removes any variation of hours over time.
Contents
1 Introduction
2 An (inter-)national Perspective
3 Data Description
3.1 The Data Set
3.2 Variable Specification
4 Empirical Analysis
4.1 Changes in the Workforce Composition
4.2 Evolution of Weekly Working Hours
4.3 Trends in Part-Time Employment
4.4 Hours, Wages, and the Inequality of Incomes
4.5 Discussion
5 Summary and Conclusion
A Appendix
A.1 OECD Statistics - Average Annual Hours
A.2 Construction of Hours Measure
A.3 Tables and Figures
Research Objectives and Key Topics
The primary objective of this thesis is to empirically investigate the interrelation between working hours, wages, and income inequality in West Germany from 1984 to 2009. The core research question addresses whether the observed trends in earnings inequality are influenced by shifts in the distribution of working hours and how part-time employment contributes to these dynamics.
- Documentation of changes in the distribution of weekly working hours.
- Analysis of trends in part-time employment across different demographic and skill groups.
- Examination of the linkage between working hours, wage structures, and income inequality.
- Evaluation of potential bias in administrative data (SIAB) when hours variations are neglected.
Extract from the Book
1 Introduction
Looking back, this slogan may be considered the starting point for a prolonged reduction of working hours in the Federal Republic of Germany (Germany, henceforth) and the great majority of industrialised countries, which has lasted through the second half of the twentieth century.
Because of the breadth of the topic and its significance for economic welfare, the realm of working hours has set the agenda for sustained public, political, and scholarly debates on a national and international scale. Not only are the hours of work a principal component to productivity, they also represent a key ingredient to an individual’s quality of life and a society’s well-being. In spite of this, thorough documentations of recent changes in the distribution of hours are relatively scarce, in particular, if compared to the abundance of research that the economic profession has directed towards the dissection of the structure of wages. Using German survey data for the period from 1984 to 2009, my thesis therefore sets out to do three things: firstly, to document recent changes in the distribution of hours; secondly, to describe the related trends in part-time employment; and thirdly, to elaborate on the interrelation between hours, wages, and incomes in determining economic inequality.
Summary of Chapters
1 Introduction: Provides the background for the prolonged reduction in working hours and outlines the three main research goals regarding hours, part-time employment, and economic inequality.
2 An (inter-)national Perspective: Compares aggregate labour supply trends in Germany with other industrialized countries to establish a global context for the decline in working hours.
3 Data Description: Details the use of GSOEP survey data, the definition of key variables such as "hours" and "wages," and the demographic stratification of the sample.
4 Empirical Analysis: Examines compositional changes in the workforce, the evolution of working hours, the rise of part-time work, and the decomposition of income inequality variance.
5 Summary and Conclusion: Synthesizes the findings, confirming the significant role of hours inequality in shaping overall income inequality and discussing the validity of using SIAB data for such analyses.
A Appendix: Contains additional statistical data, specifically OECD annual hours comparisons, technical documentation of the hours measure construction, and detailed tables/figures.
Keywords
Working hours, Wage inequality, Income inequality, Part-time employment, GSOEP, Labour supply, Workforce composition, Skill groups, Germany, Demographic change, Variance decomposition, Earnings inequality, Labour market, Productivity, Economic welfare.
Frequently Asked Questions
What is the core focus of this thesis?
The thesis explores the distribution of working hours, wages, and incomes in West Germany between 1984 and 2009, specifically focusing on how these components influence overall economic inequality.
What are the primary themes analyzed?
The study focuses on workforce composition, the rise of part-time employment, the impact of labor market flexibility, and the relationship between hourly wages and monthly income distribution.
What is the central research question?
The central question is how trends in the distribution of hours, wages, and incomes have evolved and whether current analyses of income inequality can safely ignore the variation in working hours.
Which methodology is employed?
The author utilizes GSOEP (German Socio-Economic Panel) microdata and applies variance decomposition techniques to separate the effects of wage dispersion, hours inequality, and the covariance between them.
What is covered in the main body?
The main body covers a historical overview of labor trends, a detailed description of the data used, empirical analysis of workforce demographics and hours, and a discussion on administrative data (SIAB) bias.
Which keywords define this work?
Key terms include working hours, wage inequality, income inequality, part-time employment, GSOEP, and labor supply.
How does the author define part-time employment?
For the purpose of this analysis, part-time employment is defined as any individual working less than 30 hours per week.
Why are self-employed workers excluded from the study?
Self-employed workers are excluded because their labor supply decisions are driven by fundamentally different factors, such as higher job-insecurity and greater flexibility, compared to workers in dependent employment.
What conclusion does the author reach regarding SIAB data?
The author concludes that while SIAB administrative data are generally accurate, they may understate wage inequality if they do not account for the significant and unobserved changes in individual working hours.
- Arbeit zitieren
- Benjamin Bruns (Autor:in), 2013, All Things Being Equal?, München, GRIN Verlag, https://www.grin.com/document/232028
