Research objectives and content European unemployment is currently unacceptably high, both historically and compared with the USA and Japan Consequently, recent policy debate in continental Europe has suggested a policy of worksharing. By worksharing it is hoped that a shortening of the working week (from five days to four or alternatively a cut in the daily number of standard hours will lead to increased jobs demanded and therefore lower unemployment. Indeed a number of firms in Europe (Digital, Volkswagen) have recently negotiated shorter working weeks with their unions for precisely this reason. It is not all obvious that such negotiations will ultimately lead to the objective of more jobs demanded. From a theoretical perspective, it is well-known that the standard theory of the firm does not unambiguously predict this outcome. From an empirical perspective, in recent negotiations the parties make claims out how many jobs will be created over a given time period, but there is no evidence on what the resulting effect on jobs actually is. Moreover, there are no suitable (firm-level) datasets with which one can test the basic worksharing hypothesis using econometric techniques. The main aim of the thesis is to use a new panel dataset with which I can test the worksharing hypothesis, called the I Establishment Panel, collected by the Institute of Employment Research in Germany. It is a four-wave panel (1993/415/6), with approximately 4000 firms responding each year. The basic underlying structure is to estimate employment and hours demand equations.
Training content (objective, benefit and expected impact)
The project is in the Field of Applied Microeconometrics. Using empirical evidence (i.e. the IEstablishment Panel) I will test the validity of theories by econometrical investigations. Therefore, the training content comprises handling statistical computer packages (especially Stata and Gauss), programming source code, learning advanced econometrical and mathematical methods, preparing data-sets for statistical investigations and analysing regression coefficients.
Links with industry / industrial relevance (22)
I will test the worksharing hypothesis -i.e. whether a cut in the standard working week increases employment- with a dataset out firms. My findings will be relevant for the industry in the sense that they should recommend whether lowering standard working hours (as was done by Volkswagen for example) to reduce unemployment is advisable or not.