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Overtime Work, Lack of Labour, and Structural Mismatch: Some Extensions of the “European Unemployment Programme” Framework

Published online by Cambridge University Press:  17 August 2016

Horst Entorf
Horst Entorf*
Affiliation:
Université Catholique de Louvain
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Summary

The paper extends the framework of the EUP to cover the effects of changes in the number of working hours. Beside this, a measure for the structural imbalances not only for the labour market (structural unemployment rate at equilibrium) but also for the goods market are presented. The empirical implementation introduces the concept of feasible working hours, which account for the maximal amount of overtime hours in the labour constraint. Simulation studies analyse the consequences of the present policy of German trade unions which bargain for a reduction of standard working hours. The main conclusions are: (i) The increasing mismatch on the goods market that is reported, basically results from an increasing mismatch on the labour market; (ii) reducing standard working hours might be a short-sighted policy; it may increase unemployment due to some induced substitution of workers by overtime work, and, moreover, due to the induced reduction of feasible working hours.

Résumé

Résumé

L'article etend le cadre de l'«European Unemployment Program» de manière à prendre en compte les changements du nombre d'heures prestées. Une mesure du déséquilibre structurel, tant du marché du travail (le taux structurel de chômage à l'équilibre) que du marché des biens, est présentée. Un concept d'heures de travail réalisables est également introduit. Des études de simulation analysent les conséquences d'une réduction de la durée normale du travail, l'objectif actuel des syndicats allemands. Les principales conclusions sont: (i) le déséquilibre croissant constaté sur le marché des biens résulte principalement d'un déséquilibre accru sur le marché du travail; (ii) il se pourrait qu'une politique visant à réduire le nombre d'heure de travail soit à courte-vue; elle pourrait accroître le chômage à cause, d'une part d'un accroissement des heures supplémentaires, se substituant à un accroissement en nombre des travailleurs, et d'autre part, à cause de la réduction du nombre d'heures de travail réalisables qu'elle pourrait entraîner.

Keywords

021824211021824211
Type
Part III: Disequilibrium and Business Cycle Analysis
Information
Recherches Économiques de Louvain/ Louvain Economic Review , Volume 58 , Issue 3-4: Output and Employment Fluctuations , 1992 , pp. 373 - 398
Copyright
Copyright © Université catholique de Louvain, Institut de recherches économiques et sociales 1992 

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Footnotes

(*)

Earlier versions of the paper were presented to the “Journées de l'Association Française des Sciences Economiques, 1991”, Marseille, and at economic seminars in Louvain-la-Neuve and Munich. I would like to thank the participants of these seminars as well as Henri Sneessens and three anonymous referees for helpful comments.

References

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