NBER Working Papers and Publications
|December 2000||The Incentive for Working Hard: Explaining Hours Worked Differences in the U.S. and Germany|
with Richard B. Freeman: w8051
This paper seeks to explain the greater hours worked by Americans compared to Germans in terms of forward-looking labor supply responses to differences in earnings inequality between the countries. We argue that workers choose current hours of work to gain promotions and advance in the distribution of earnings. Since US earnings are more unequally distributed than German earnings, the same extra work pays off more in the US, generating more hours worked. Supporting this inequality-hours hypothesis, we show that in both countries hours worked is positively related to earnings inequality in cross section occupational contrasts and that hours worked raises future wages and promotion prospects in longitudinal data.
Published: “The Incentive for Working Hard: Explaining Hours Worked Differences in the US and Germany,” with Linda A. Bell. Labour Economics Special Conference Volume 8:2 (May 2001) pp 181-202. citation courtesy of
|July 1994||Why Do Americans and Germans Work Different Hours?|
with Richard Freeman: w4808
This paper documents the difference between the annual hours worked by employed Americans and Germans, decomposes the difference into differences due to vacation and holiday time and to hours worked while on the job, and examines alternative explanations for the difference. Employed Americans work roughly 10-15% more hours than Germans. Since American employment-population rates exceed those of Germans, adult Americans average some 20% more work time than adult Germans. At the same time, Americans show greater preference for additional hours worked than do Germans. Both of these differences developed in the past 20 years. Two decades ago, Americans worked less than Germans, and it was the Germans who wanted to work more hours. Standard labor supply analyses do not appear able to expl...
Published: "Why Do Americans and Germans Work Different Hours?", with Linda Bell. Chapter 5 In Friedrich Buttler, Wolfgang Franz, Ronald Schettkat, and David Soskice (eds) Institutional Frameworks and Labor Market Performance: Comparative Views on the U.S. and German Economies
|February 1991||Lump-Sums, Profit Sharing, and the Labor Costs in the Union Sector|
with David Neumark: w3630
This paper documents the increase in the use of lump-sum payments and profit sharing plans in union contracts in the 1980s, and evaluates the extent to which these innovations may have contributed to moderation in the growth of labor costs, and increased pay flexibility. We find evidence that lump-sum and profit sharing arrangements reduced labor cost growth at both the aggregate and firm level. But the evidence linking these plans to labor cost flexibility is mixed; although the evidence suggests that profit sharing plans may be associated with greater flexibility at the firm level, there is no evidence that lump-sum plans increase flexibility at either the firm or aggregate level.
Published: Linda A. Bell and David Neumark. "Lump-sum Payments and Profit-sharing Plans in the Union Sector of the United States Economy" The Economic Journal, Vol. 103, No. 418 (May, 1993), pp. 602-619
|April 1985||Does a Flexible Industry Wage Structure Increase Employment?: The U.S. Experience|
with Richard B. Freeman: w1604
This paper examines the flexibility of wages across industries inthe U.S. and seeks to determine the potential impact which changes in the industrial wage structure may have for employment. With regard to the flexibility of wages across industries, we find that the U.S., alone among the major OECD countries, has experienced substantial changes in the industry wage structure since 1970, with the variation of log wages among industries increasing dramatically, particularly in the 1970s. This represents a widening of the gap between wages in the high and low wage sectors. In order to evaluate these changes, we estimate equations linking changes in industry wages over an extended period of time to a variety of potential wage determining characteristics. We find that industrial wages are positi...
Published: Published as "Wage Rigidity in West Germany: A Comparison with the U.S. Experience", FRBNY, Vol. 11, no. 3 (1986): 11-21.