Designing the optimal length of working time: a counterfactual policy analysis
AbstractPurpose – How many hours per week should workers in the USA and Germany spend at their paying jobs? The present paper aims to address this question by constructing policymakers' reaction functions capable of modelling the optimal length of working time as a function of the relevant labour market variables. Design/methodology/approach – The study is based on a counterfactual policy experiment. Given a policymaker's loss function and a structural model of the labour market alternative specifications of reaction functions are defined where the response coefficients indicate how policymakers should react to any news in the labour market in order to stabilise employment and wages. Findings – The results suggest that simple rules perform quite well and that the advantages obtained from adopting an optimal control-based rule are not so great. Moreover, the analysis emphasises the success of the wage-based rule and of the employment-based rule in the USA and Germany, respectively. Research limitations/implications – The study is based on a counterfactual policy experiment, which perhaps limits its operational value. Practical implications – Labour market authorities might stabilise employment and wages by implementing policy rules. Originality/value – The paper proposes a policy rule to capture the dynamics of the weekly working hours. According to the rule in the paper the length of the workweek is an inverse function of the deviation between the actual and potential employment level.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Emerald Group Publishing in its journal International Journal of Manpower.
Volume (Year): 28 (2007)
Issue (Month): 7 (November)
Contact details of provider:
Web page: http://www.emeraldinsight.com
Postal: Emerald Group Publishing, Howard House, Wagon Lane, Bingley, BD16 1WA, UK
Other versions of this item:
- Carlo Altavilla & Antonio Garofalo & Concetto Paolo Vinci, 2007. "Designing the optimal length of working time: a counterfactual policy analysis," International Journal of Manpower, Emerald Group Publishing, vol. 28(1), pages 627 - 648, October.
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jade Turvey).
If references are entirely missing, you can add them using this form.