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Diskussionspapiere - Hannover Economic Papers (HEP)

Employment Stability via Annualized Hours Contracts

Autor: Carstensen, Vivian
Nummer: 230, Mar 2000, pp. 31

The presented paper proves that working time arrangements, which include hours flexibil-ity and enable hours deposits, are appealing under product market uncertainty. The model integrates efficiency wage arguments into an implicit insurance?contract environment, thus extending the existing literature. The solutions are renegotiation?proof and the long?run op-timum is spot implementable. Moreover, well?defined complementarities with additional instruments exist: institutionalized systems of firm level communication and information, investments in information technology and further training as well as team work together with working time accounts imply positive system effects, thus constituting a complemen-tary human resource management system.

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