The effects of works councils on overtime hours - a censored quantile regression approach

Abstract

This study analyzes the impact of German codetermination rights on overtime hours. Using German personal data, our results show that the effects of works councils strongly depend on the contracted working time. Furthermore, we find a strong heterogeneity in the effects of works councils across different quantiles of the overtime hours distribution. By considering contracted working time effects and comparing conditional quantiles we find that works council increase the amount of overtime hours if an employee regularly works 35 hours per week. This effect diminishes with increasing quantiles of the distribution of overtime hours. If an employee regularly works 40 hours per week, works councils reduce overtime hours. This reduction becomes larger if higher quantiles are analyzed.