Working Hours Decisive for Hourly Wage

The gross hourly wage of women in the western Länder depends on their working hours. For instance, women working less than 20 hours per week have to accept significant wage cuts. By contrast, in the case of women working between 20 and 38 hours per week no significant wage gaps could be determined. This is the result of a current study carried out by the Centre for European Economic Research in Mannheim (ZEW) within the context of a research project on the flexibilisation of working time partly funded by the Fritz-Thyssen Foundation.

In view of the persistent employment crisis, the extension of part-time work is frequently discussed as a possible remedy. Since the German reunification, the rate of part-time employment has increased from 14 to 18.5 per cent. However, there are still huge disparities between the old and the new Länder as well as between men and women. In the new Länder only 12 per cent of all employees worked part-time in 1998. With 21.6 per cent, the part-time ratio is significantly higher among East German women. In West Germany at least 40 per cent of female employees had part-time contracts in 1998. Seven years before, this proportion was about 34 per cent. Despite this increase, part-time employment still plays a minor role in Germany when compared to other European countries. One reason for this could be that the earnings in part-time jobs are lower than in full-time jobs. The ZEW study, however, does not confirm this assumption since the gross hourly wage of West German women with weekly working hours of between 20 and 38 hours is near-constant. Only women working less than 20 hours are paid considerably less, even when taking into account educational differences and other wage determining factors.

Furthermore, it becomes apparent that the relationship between working hours and wage rate depends on previous professional experience. The general human capital that is acquired by means of a gainful employment increases the productivity of an employee and thus also their hourly wage. However, only with a certain amount of working hours does this productivity effect find expression financially. In case of a longer professional experience, the positive wage effect is greater for women working full-time than for women working only a few hours per week. The study reveals, on the other hand, that the hourly wage of women working extra hours is lower than those of full-time employees, even though in most sectors they are entitled to receive overtime premiums according to the collective agreements. The reason for this is that merely ten per cent of the women that work overtime and do not have the possibility to compensate it with free time are full-time employees covered by a collective agreement. In the case of employment relationships that are not covered by a collective agreement it is probable that extra hours are often neither paid nor can they be compensated for by free time.

Contact

Prof. Dr. Elke Wolf, E-mail: wolf@zew.de