In Germany, the legal framework for reducing working hours has been considerably changed at the beginning of the year of 2001 by the Teilzeit- und Befristungsgesetz (Part-Time and Fixed-term Act). The law was subject to vigorous debate, since small firms claimed to be overly burdened by higher freedom of choice of their workers to switch from full-time to part-time employment. At the same time, the hope for substantial changes with respect to the overall volume of both part-time work and aggregate employment has been called into question by many experts. The task of the study is to provide a broad-based evaluation of the effects of the new law on part-time work until spring 2004.
Within the division of labour agreed upon with respect to the overall project, Ifo will mainly look at the impact of the part-time act observable at a firm-level, while ISO’s part is to analyse the effects for employees. Both sub-tasks will be addressed using all relevant data form external sources that will become available for further empirical research until summer 2003, discussions with experts which will serve for pre-testing additional survey instruments, and representative surveys conducted among both employers and employees. Ifo’s survey will be conducted among firms, focusing on quantitative aspects of part-time employment, the experience of employers when applying the rules established by the new legislation, and the impact on the organisation of firm-level processes and production costs in particular. The latter aspects are important because they may offer an opportunity for employers to deny changes of the regular work-load in individual cases. Taking into account information regarding the pre-2000 ("policy-off") and the current ("policy-on") situation, econometric assessment of survey results and external data will be based on a control-vs.-treatment methodology which has become conventional in evaluation studies.
The female domination as well as other structural characteristics of part time employment are a stable phenomena over a long period and which was not influenced by the introduction of the TzBfG. In 2002 there were 250.000 applications to reduce working time altogether. One fifth of the applications made referred directly to the TzBfG. Roughly 17 % of all employees who have reduced their working time since 1.1.2001 said that their wish to reduce working time was strengthened by the TzBfG. For 60 % of them the law helped to circumvent difficulties at work. 4 % of all establishments open more vacancies for part time positions than previously done. Firms most commonly denied an employee’s application to reduce working time because of organisational reasons and adverse effects on the production process. One fifth of all rejections were due to disproportionately high costs. Since January 2001 from all questioned, around 21 % wished to reduce their working time and 4 % actually reduced their working time on average by 12,8 hours per week.
In total only 44 % of all establishments answered that they used measures, which can be classified as employment-effective, as a reaction to an employee’s reduction in working time. 56 % claimed that they used measures, which increased their efficiency. Small and medium-sized establishments more often use employment-effective measures to compensate missing working time than large establishments.
The most important reasons for part time employment since 1999 mentioned by firms are requests by employees and the own needs for high flexibility. Weighted by the number of employees, it appeared that large establishments are more able to accommodate requests form their employees. Evidence for that is that items like “requests by employees” and “continued employment during/after parental leave” are the two most mentioned reasons after weighting with the number of employees.
The reasons mentioned by employees for the reduction of working time are more spare time than more income (32,2 %), the need for childcare (31,8 %) and the interest in further education.
Potential winner of the TzBfG could on the one hand be employees, who are in parental leave. Two thirds of this group of employees wish, given they are temporarily full time employed, to change in a part time job afterwards and, given they are in a part time job, they wish to stay in a part time position after returning form parental leave. In addition people looking for work could profit from the TzBfG if they belong to the 25 % of job seekers, who are looking invariably for a part time job, or to the next 25 % of job seekers, who are indifferent between a full or a part time job.
The booming economy in Germany in 2000 took due to the worsening global and national economic situation a downturn just at the beginning of 2001, the commencement of the TzBfG. Due to the unprecedented severity of the economic downturn in the following period and the short evaluation duration of two years after the TzBfG came into effect there are (fundamental) severe problems in evaluating the impact of the TzBfG. Since 2001 German firms are in an economic environment, where they attempt to uphold production with the current workforce by using overtime and other working time savings account arrangements.
The measured impact of the TzBfG on the basis of the data form the IAB-establishment panel suggests that employment decreased by 1 % to 3 %. The unprecedented economic weakness during the evaluation period has to be taken into account for a meaningful interpretation of the results. By looking at the magnitude of the impact doubts remain whether all cyclical movements were successfully filtered out. It could also be that the long period of poor economic performance lead firms to use organisational measure to cope with working time reductions instead of employment-effective measures. However, the results based on the Ifo survey “Teilzeit” (part time) 2003 suggest – although insignificant – an impact of –0,9 % to –0,3 %, which emphasises that the TzBfG had certainly no positive impact on employment and the number of employees.
Further estimates with the IAB-establishment panel with the goal to disentangle the effect for full and part time employment suggest that the TzBfG caused only full time jobs to be cut while part time jobs remained unaffected. A probit-estimate on the basis of the annual survey on new hires showed that the hiring opportunities for women compared with men remained unchanged.
RSS