Work, Compare, Repeat: Social Comparisons as a Determinant of Working Hours in Germany

Working hours decisions have long been a central topic in labour economics. While much of the existing research has focused on individual determinants of working hours preferences, this thesis shifts the attention to the social dimensions of labour supply decisions. Drawing on a long tradition of economic thought, the thesis examines the role of social comparisons in influencing working hours decisions. The overarching goal of this research is to explore how social comparisons determine working hours in Germany. The core premise is that individuals adjust their working hours in an effort to improve, or at least maintain, their relative position. Each paper contributes to addressing the main research question by analysing specific sub-questions. Paper 1 examines how occupational wage inequality influences working hours, linking them through social comparisons. Paper 2 explores this mechanism further, analysing how individuals’ perceptions of their standard of living relative to others impact working time preferences, with a focus on heterogeneous effects by reference group. Paper 3 investigates how colleagues’ working hours shape individual preferences, highlighting the tension between social context and personal reasoning. A key feature of this thesis is the use of diverse quantitative methods across its three papers, which enables a comprehensive exploration of the research topic. Together, the papers demonstrate that social comparisons play a crucial role in working hours decisions. They show that social comparisons affect working hours outcomes in terms of actual, contractual, and preferred working hours. The findings point to two key implications. Firstly, they illustrate that social comparisons are a potential obstacle to working hours reductions. Secondly, they highlight the importance of collective action for working time policy. By illustrating the impact of social influences, the thesis demonstrates the endogenous nature of preferences in shaping working hours decisions.