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How Working Time Reduction Affects Employment and Earnings

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Author Info

  • Raposo, Pedro

    () (Tilburg University)

  • van Ours, Jan C.

    () (Tilburg University)

Abstract

December 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 Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3723.

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Length: 20 pages
Date of creation: Sep 2008
Date of revision:
Publication status: published in: Economics Letters, 2010, 106 (1), 61-63
Handle: RePEc:iza:izadps:dp3723

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Keywords: employment dynamics; policy reform; workweek reduction; earnings;

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References

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  1. Cardoso, Ana Rute, 2004. "Wage Mobility: Do Institutions Make a Difference? A Replication Study Comparing Portugal and the UK," CEPR Discussion Papers 4355, C.E.P.R. Discussion Papers.
  2. Jennifer Hunt, 1996. "Has Work-Sharing Worked in Germany?," NBER Working Papers 5724, National Bureau of Economic Research, Inc.
  3. Kapteyn, A. & Kalwij, A.S. & Zaidi, M.A., 2000. "The Myth of Worksharing," Discussion Paper 2000-23, Tilburg University, Center for Economic Research.
  4. Mikal Skuterud, 2007. "Identifying the Potential of Work-Sharing as a Job-Creation Strategy," Journal of Labor Economics, University of Chicago Press, vol. 25, pages 265-287.
  5. 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.
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Cited by:
  1. Santos Raposo, P.M. & Ours, J.C. van, 2009. "How a Reduction of Standard Working Hours Affects Employment Dynamics," Discussion Paper 2009-50, Tilburg University, Center for Economic Research.

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