Trust-based working time spurs innovation
Holger Görg, Olivier N. Godart, Aoife Hanley, Christiane Krieger-Boden 08 July 2014
Many firms are replacing traditional working hours with more flexible arrangements, reflecting new thinking on employee motivation. This column presents evidence from Germany that trust-based working time is associated with increased innovation. However, trust-based working hours also contribute to the blurring of workers’ professional and private lives, and may lead to excessive overtime. Careful design of trust-based working arrangements is required to reap the innovations gains while avoiding the health pitfalls.
The organisation of work has changed dramatically over the last few decades. In particular, the formerly rigidly regulated working time has been replaced by flexible working hour schemes in numerous firms around the world. Taking Germany as an example, in 2010, 36% of employees were entitled to some form of flexible working hours scheme (Figure 1).
Health economics Labour markets Productivity and Innovation
Germany, working hours, trust, health, innovation, motivation, overtime, flexibility, working time
The “de-taxation” of overtime hours: Lessons from the French experiment
Pierre Cahuc, Stéphane Carcillo 02 February 2011
In October 2007 France introduced an exemption on income tax and social security contributions for overtime work. In the second of two columns on the labour market, the authors show that this reform has had no significant impact on hours worked and that it induced workers and employers to manipulate the overtime hours they declare in order to optimise their tax situation.
In France, since 1 October 2007, remuneration paid for hours worked overtime has been exempt from income tax and a substantial portion of social security contributions. This “de-taxation” was an essential plank of the economic policy introduced after the presidential elections of May 2007. For France's new president, Nicolas Sarkozy, de-taxation of overtime hours offered numerous advantages. In promoting work, it sounded the death knell of the Malthusian culture symbolised by the 35-hour work week, which impact on employment was open to legitimate doubt.
Labour markets Taxation
France, taxation, overtime, labour market