Employment stability via Annualized Hours Contracts?

The presented paper proves that working time arrangements, which include hours flexibilityand enable hours deposits, are appealing under product market uncertainty. The modelintegrates efficiency wage arguments into an implicit insurance-contract environment, thusextending the existing literature. The solutions are renegotiation-proof and the long-run op-timumis spot implementable. Moreover, well-defined complementarities with additionalinstruments exist: institutionalized systems of firm level communication and information,investments in information technology and further training as well as team work togetherwith working time accounts imply positive system effects, thus constituting a complementaryhuman resource management system.