Lower Wage Rates for Lesser Hours ? A simultaneous wage-hours model for Germany.

This paper analyzes the impact of working hours on gross hourly wage rates of West German women by using a simultaneous wage-hours model which fully accounts for labor supply effects. The wage-hours profiles are approximated by linear spline functions. The estimation results show that the hourly wage rate is strongly affected by working hours and that wage-hours profiles differ among specific groups of individuals. Despite these differences, the lower marginal compensation for jobs with less than 20 hours per week and for overtime hours is a robust result. The hourly wage rate of jobs with 20 to 37 hours does hardly depend upon hours.

Wolf, Elke (2002), Lower Wage Rates for Lesser Hours ? A simultaneous wage-hours model for Germany., Labour Economics 9 , 643-663