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Working Time, Employment, and Work Sharing: Evidence from Sweden

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Author Info

  • Jacobson, Tor

    ()
    (Department of Economic Statistics)

  • Ohlsson, Henry

    ()
    (Department of Economics)

Abstract

We study three necessary conditions for work sharing to increase employment. First, there must exist a negative long-run relation between working time and employment. Second, hours per worker must be exogenous with respect to wages and employment. Third, policy makers must be able to influence actual hours per worker. We formulate a theoretical model for employment, hours peer worker, production, and real wages. A VAR system with cointegrating constraints is estimated by maximum likelihood using Swedish private sector data 1970-1- 1990:4 We find (I) no long-run relation between hours per worker and employment, (II) that hours per worker are endogenous with respect to the estimation of long-run parameters, and (III) that legislated working time and hours per worker are related to each other in the long run.

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Bibliographic Info

Paper provided by Stockholm School of Economics in its series Working Paper Series in Economics and Finance with number 135.

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Length: 21 pages
Date of creation: Nov 1996
Date of revision:
Publication status: Published in Empirical Economics, 2000, pages 169-187.
Handle: RePEc:hhs:hastef:0135

Contact details of provider:
Postal: The Economic Research Institute, Stockholm School of Economics, P.O. Box 6501, 113 83 Stockholm, Sweden
Phone: +46-(0)8-736 90 00
Fax: +46-(0)8-31 01 57
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Web page: http://www.hhs.se/
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Keywords: Work sharing; maximum likelihood cointegration; employment; hours per worker; real wages;

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References

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  1. Calmfors, Lars, 1985. "Work sharing, employment and wages," European Economic Review, Elsevier, vol. 27(3), pages 293-309.
  2. Johansen, Soren, 1992. "Cointegration in partial systems and the efficiency of single-equation analysis," Journal of Econometrics, Elsevier, vol. 52(3), pages 389-402, June.
  3. Jennifer Hunt, 1998. "Hours Reductions as Work-Sharing," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 29(1), pages 339-381.
  4. Hunt, Jennifer, 1997. "Has Work Sharing Worked in Germany?," CEPR Discussion Papers 1553, C.E.P.R. Discussion Papers.
  5. Johansen, Soren & Juselius, Katarina, 1990. "Maximum Likelihood Estimation and Inference on Cointegration--With Applications to the Demand for Money," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 52(2), pages 169-210, May.
  6. King, Robert G. & Plosser, Charles I. & Stock, James H. & Watson, Mark W., 1991. "Stochastic Trends and Economic Fluctuations," American Economic Review, American Economic Association, vol. 81(4), pages 819-40, September.
  7. Søren Johansen & Katarina Juselius, 1992. "Identification of the Long-Run and the Short-Run Structure: An Application to the ISLM Model," Discussion Papers 92-04, University of Copenhagen. Department of Economics.
  8. Freeman, Richard B, 1995. "The Large Welfare State as a System," American Economic Review, American Economic Association, vol. 85(2), pages 16-21, May.
  9. Jennifer Hunt, 1996. "The Response of Wages and Actual Hours Worked to the Reductions of Standard Hours," NBER Working Papers 5716, National Bureau of Economic Research, Inc.
  10. Pencavel, John & Holmlund, Bertil, 1988. "The Determination of Wages, Employment, and Work Hours in an Economy with Centralised Wage-Setting: Sweden, 1950-83," Economic Journal, Royal Economic Society, vol. 98(393), pages 1105-26, December.
  11. Johansen, Soren, 1991. "Estimation and Hypothesis Testing of Cointegration Vectors in Gaussian Vector Autoregressive Models," Econometrica, Econometric Society, vol. 59(6), pages 1551-80, November.
  12. Johansen, Søren & Juselius, Katarina, 1992. "Testing structural hypotheses in a multivariate cointegration analysis of the PPP and the UIP for UK," Journal of Econometrics, Elsevier, vol. 53(1-3), pages 211-244.
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Citations

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Cited by:
  1. Erik de Regt, 2009. "Hourly wages and working time in the Dutch market sector 1962-1995," Applied Economics, Taylor & Francis Journals, vol. 41(6), pages 765-778.
  2. Simmons, R. & Schank, Thorsten & Andrews, Martyn J., 2004. "Does Worksharing Work? Some Empirical Evidence from the IAB Panel," Discussion Papers 25, Friedrich-Alexander-University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
  3. Akram,Q.F. & Nymoen,R., 2001. "Employment behaviour in slack and tight labour markets," Memorandum 27/2001, Oslo University, Department of Economics.
  4. Sven Wehke, 2007. "Union Wages, Hours of Work and the Effectiveness of Partial Coordination Agreements," FEMM Working Papers 07019, Otto-von-Guericke University Magdeburg, Faculty of Economics and Management.
  5. Kapteyn, A. & Kalwij, A. & Zaidi, A., 2000. "The Myth of Worksharing," Economics Series Working Papers 9932, University of Oxford, Department of Economics.
  6. M. J. Andrews & T. Schank & R. Simmons, 2005. "Does Worksharing Work? Some Empirical Evidence From The Iab-Establishment Panel," Scottish Journal of Political Economy, Scottish Economic Society, vol. 52(2), pages 141-176, 05.
  7. Lundholm, M. & Ohlsson, H., 1995. "Wages for Women and Publicly Financed Day Care," Papers 1995-23, Uppsala - Working Paper Series.
  8. Chang, Juin-jen & Huang, Chun-chieh & Lai, Ching-chong, 2007. "Working hours reduction and wage contracting style in a dynamic model with labor adjustment costs," Journal of Economic Dynamics and Control, Elsevier, vol. 31(3), pages 971-993, March.
  9. Guillaume ROCHETEAU, 2000. "Working Time Regulation in a Search Economy with Worker Moral Hazard," Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) 00.06, Université de Lausanne, Faculté des HEC, DEEP.
  10. Nordström Skans, Oskar, 2001. "The effects of working time reductions on wages, actual hours and equilibrium unemployment," Working Paper Series 2001:8, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  11. Stuart Glosser & Lonnie Golden, 2005. "Is labour becoming more or less flexible? Changing dynamic behaviour and asymmetries of labour input in US manufacturing," Cambridge Journal of Economics, Oxford University Press, vol. 29(4), pages 535-557, July.
  12. Skans, Oskar Nordstrom, 2004. "The impact of working-time reductions on actual hours and wages: evidence from Swedish register-data," Labour Economics, Elsevier, vol. 11(5), pages 647-665, October.
  13. Petri Böckerman & Jaakko Kiander, 2002. "Determination of Average Working Time in Finland," LABOUR, CEIS, vol. 16(3), pages 557-568, 09.
  14. Carlo Altavilla & Antonio Garofalo & Concetto Paolo Vinci, 2004. "Evaluating The Effects Of Working Hours On Employment And Wages," Working Papers 11_2004, D.E.S. (Department of Economic Studies), University of Naples "Parthenope", Italy.
  15. Philippe Askenazy, 2013. "Working time regulation in France from 1996 to 2012," Cambridge Journal of Economics, Oxford University Press, vol. 37(2), pages 323-347.
  16. Akram, Q. Farooq & Nymoen, Ragnar, 2006. "Econometric modelling of slack and tight labour markets," Economic Modelling, Elsevier, vol. 23(4), pages 579-596, July.

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