How Working Time Reduction Affects Employment and Earnings
AbstractDecember 1, 1996 Portugal introduced a new law on working hours which gradually reduced the standard workweek from 44 hours to 40 hours. We study how this mandatory working hours reduction affected employment and earnings of workers involved. We find for workers who were affected by the new law that working hours decreased, while hourly wages increased, keeping monthly earnings approximately constant. We also find that the working hours reduction did not lead to an increased job loss of workers directly affected. Finally, we find that workers who themselves were not directly affected were influenced by the working hours reduction indirectly. If they worked in a firm with many workers working more than 40 hours before the change in law was introduced.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3723.
Length: 20 pages
Date of creation: Sep 2008
Date of revision:
Publication status: published in: Economics Letters, 2010, 106 (1), 61-63
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Other versions of this item:
- Santos Raposo, P.M. & Ours, J.C. van, 2008. "How Working Time Reduction Affects Employment and Earnings," Discussion Paper 2008-81, Tilburg University, Center for Economic Research.
- J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- J63 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Turnover; Vacancies; Layoffs
- J81 - Labor and Demographic Economics - - Labor Standards - - - Working Conditions
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-10-13 (All new papers)
- NEP-BEC-2008-10-13 (Business Economics)
- NEP-LAB-2008-10-13 (Labour Economics)
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