Hourly wages and working time in the Dutch market sector 1962-1995

Abstract

This paper analyses the joint behaviour of hourly wages and standard hours in the Netherlands. With respect to the development of full-time hours to different hypotheses are suggested: work-sharing or productivity-sharing. Under the work-sharing hypothesis, high unemployment would lead to reduced hours, whereas under productivity-sharing, increased productivity leads to higher wages or reduced hours. The evidence is in favour of the productivity hypothesis. There is no direct impact of unemployment on the evolution of hours. Moreover, although reduced hours tend to increase hourly wages in the short run, this is not the case in the long run.