Publication type
Research Paper
Series Number
33577
Series
NBER Working Paper Series
Authors
Publication date
March 1, 2025
Summary:
This paper investigates self-reported wedges between how much people work and how much they want to work, at their current wage. More than two-thirds of full-time workers in German survey data are overworked—actual hours exceed desired hours. We combine this evidence with a simple model of labor supply to assess the welfare consequences of tighter weekly hours limits via willingness-to-pay calculations. According to counterfactuals, the optimal length of the workweek in Germany is 37 hours. Introducing such a cap would raise welfare by .8-1.6% of GDP. The gains from a shortened workweek are largest for workers who are married, female, white collar, middle aged, and high income. An extended analysis integrates a non-constant wage-hours relationship, falling capital returns, and a shrinking tax base.
DOI
https://doi.org/10.3386/w33577
Subjects
Link
https://www.nber.org/papers/w33577
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