Working-Time Regulation, Firm Heterogeneity, and Efficiency
AbstractA labour-matching economy with ex post heterogeneous firms is presented. When bargaining over the wage, firms and workers do not know the level of product demand. Once demand is realized, hours of work are chosen. We show that the existence of a legal workweek may enhance efficiency with respect to laissez-faire: while laissez-faire is good at allocating hours across firms, regulation may be better at reproducing optimal hours. Shortening the legal workweek raises employment and is Pareto-improving if and only if the demand faced by low-demand firms and/or the overtime premium are small enough.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 3736.
Date of creation: Feb 2003
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Find related papers by JEL classification:
- E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
- J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
- J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
- J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
- J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
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- Stéphane Auray & Samuel Danthine, 2008.
"Bargaining Frictions, Labor Income Taxation and Economic Performance,"
Cahiers de recherche
- Auray, Stéphane & Danthine, Samuel, 2010. "Bargaining frictions, labor income taxation, and economic performance," European Economic Review, Elsevier, vol. 54(6), pages 778-802, August.
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- Stéphane Auray & Samuel Danthine, 2008. "Bargaining Frictions, Labor Income Taxation and Economic Performance," Working Papers 2008-1, Universidad de Málaga, Department of Economic Theory, Málaga Economic Theory Research Center.
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"Testing the effectiveness of the French work-sharing reform: a forecasting approach,"
IMK Working Paper
03-2005, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
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- Schreiber, Sven, 2008. "Did work-sharing work in France? Evidence from a structural co-integrated VAR model," European Journal of Political Economy, Elsevier, vol. 24(2), pages 478-490, June.
- Díaz, Antonia & Echevarria, Cristina, 2009. "Why a fixed workweek?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 38(5), pages 790-798, October.
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