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The Effects of Labor Market Conditions on Working Time: the US-EU Experience

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Author Info
Claudio Michelacci () (CEMFI and CEPR, Spain and The Rimini Centre for Economic Analysis, Italy)
Josep Pijoan-Mas () (CEMFI and CEPR, Spain)

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Abstract

We consider a labor market search model where, by working longer hours, individuals acquire greater skills and thereby obtain better jobs. We show that job inequality, which leads to within-skill wage differences, gives incentives to work longer hours. By contrast, a higher probability of losing jobs, a longer duration of unemployment, and in general a less tight labor market discourage working time. We show that the different evolution of labor market conditions in the US and in Continental Europe over the last three decades can quantitatively explain the diverging evolution of the number of hours worked per employee across the two sides of the Atlantic. It can also explain why the fraction of prime age male workers working very long hours has increased substantially in the US, after reverting a trend of secular decline.

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Paper provided by Rimini Centre for Economic Analysis in its series Working Paper Series with number 28-08.

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Date of creation: Jan 2008
Date of revision: Jan 2008
Handle: RePEc:rim:rimwps:28-08

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Related research
Keywords: working hours; wage inequality; unemployment; search; human capital filtering;

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Find related papers by JEL classification:
G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Investment Policy
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
E24 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution

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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Lonnie Golden, 2009. "A Brief History of Long Work Time and the Contemporary Sources of Overwork," Journal of Business Ethics, Springer, vol. 84(2), pages 217-227, January. [Downloadable!] (restricted)
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