Hostname: page-component-7c8c6479df-24hb2 Total loading time: 0 Render date: 2024-03-28T16:21:08.752Z Has data issue: false hasContentIssue false

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*
Affiliation:
Université Catholique de Louvain
Get access

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.

Type
Part III: Disequilibrium and Business Cycle Analysis
Copyright
Copyright © Université catholique de Louvain, Institut de recherches économiques et sociales 1992 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

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

REFERENCES

Brinkmann, C., Gürtler, J., Kohler, H., Reyher, L., Rudat, R., Spitznagel, E. and Teriet, B. (1986), Überstunden: Entwicklung, Strukturen und Bestimmungsgrößen, Bciträge aus der Arbeitsmarkt- und Berufsforschung 98, Nürnberg.Google Scholar
Drèze, J.H. and Bean, C. (1990), Europe's unemployment problem: Introduction and synthesis, in: Drèze, J.H. and Bean, C. (eds.), Europe's Unemployment Problem, Cambridge: MIT-Press.Google Scholar
EEC (1991), Employment in Europe, Luxembourg: Office for Official Publications of the European Communities.Google Scholar
Entorf, H., König, H. and Pohlmeier, W. (1992), Labor utilization and non-wage labor costs in a disequilibrium macro framework, The Scandinavian Journal of Economics 94, 7182.Google Scholar
Entorf, H., Franz, W., König, H. and Smolny, W. (1990), The development of German employment and unemployment: Estimation and simulation of a small macro model, in: Drèze, J.H. and Bean, C. (eds.), Europe's Unemployment Problem, Cambridge: MIT-Press.Google Scholar
Gagey, F., Lambert, J.P. and Ottenwaelter, B. (1990), A disequilibrium estimation of the French labour market using business survey information, in: Drèze, J.H. and Bean, C. (eds.), Europe's Unemployment Problem, Cambridge: MIT-Press.Google Scholar
Gouriéroux, C., Laffont, J.J. and Monfort, A. (1984), Econométrie des modèles d'áquilibre avec rationnement: une mise à jour, in: Annales de l'INSEE 55/56, 538.Google Scholar
Hart, R.A. (1987), Working Time and Employment, London: Allen and Unwin.Google Scholar
Hart, R.A. and Kawasaki, S. (1987), Payroll taxes and factor demand, in: Ehrenberg, R.G. (ed.), Research in Labor Economics 9, Greenwich: JAI Press.Google Scholar
König, H. and Entorf, H. (1990), Strukturelle Arbeitslosigkeit und unausgelastete Kapazitäten, in: Allgemeines Statistisches Archiv 74, 117136.Google Scholar
Lambert, J.P. (1988), Disequilibrium Macroeconomic Models, Cambridge: Cambridge University Press, 1988.Google Scholar
Licandro, O. (1991), Monopolistic competition and aggregation over micromarkets in disequilibrium, mimeo, Universitity Carlos III, Madrid.Google Scholar
Malinvaud, E. (1980), Macroeconomic rationing of employment, in: Malinvaud, E. and Fitoussi, J.-P. (eds.), Unemployment in Western Countries, New York: Macmillan.Google Scholar
Muellbauer, J. (1978), Macrotheory vs. macroeconometries: The Treatment of disequilibrium in macro models, Birkbeck Discussion Paper 59, Birkbeck College, London.Google Scholar
Smolny, W. (1992), Dynamic factor demand in a rationing model, Paper to be presented to the EEA meeting in Dublin, August 1992, University of Konstanz.Google Scholar
Sneessens, H. and Drèze, J.H. (1986), A discussion of Belgian unemployment, combining traditional concepts and disequilibrium econometrics, in: Economica 53, S89S119.Google Scholar
Sneessens, H. (1983), Aggregation in quantity rationing models, unpublished manuscript, Universite Catholique de Louvain, Louvain-la-Neuve.Google Scholar
Sneessens, H. (1987), Investment and the inflation-unemployment tradeoff in a macroeconomic rationing model with monopolistic competition, in: European Economic Review 31, 781815.Google Scholar
Sneessens, H. (1990), Structural problems and quantity constraints in macroeconomic models, in: Structural Change and Economic Dynamics 1, 2740.Google Scholar