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How a Reduction of Standard Working Hours Affects Employment Dynamics

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  • Pedro Raposo
  • Jan Ours

Abstract

On December 1, 1996, a new law was implemented in Portugal to gradually reduce the stan- dard working week from 44 to 40 hours. We study how this mandatory reduction affected employment through job creation and job destruction. We find evidence that the working hours reduction had a positive effect on employment through a fall in job destruction.
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Suggested Citation

  • Pedro Raposo & Jan Ours, 2010. "How a Reduction of Standard Working Hours Affects Employment Dynamics," De Economist, Springer, vol. 158(2), pages 193-207, June.
    • Handle: RePEc:kap:decono:v:158:y:2010:i:2:p:193-207
    DOI: 10.1007/s10645-010-9142-5
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    References listed on IDEAS

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    1. Mata, Jose & Portugal, Pedro, 1994. "Life Duration of New Firms," Journal of Industrial Economics, Wiley Blackwell, vol. 42(3), pages 227-245, September.
    2. Manning, Alan, 2011. "Imperfect Competition in the Labor Market," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 11, pages 973-1041, Elsevier.
    3. Matthieu Chemin & Etienne Wasmer, 2009. "Using Alsace-Moselle Local Laws to Build a Difference-in-Differences Estimation Strategy of the Employment Effects of the 35-Hour Workweek Regulation in France," Journal of Labor Economics, University of Chicago Press, vol. 27(4), pages 487-524, October.
    4. Pedro Portugal & Olivier Blanchard, 2001. "What Hides Behind an Unemployment Rate: Comparing Portuguese and U.S. Labor Markets," American Economic Review, American Economic Association, vol. 91(1), pages 187-207, March.
    5. Jennifer Hunt, 1999. "Has Work-Sharing Worked in Germany?," The Quarterly Journal of Economics, Oxford University Press, vol. 114(1), pages 117-148.
    6. O. Ashenfelter & D. Card (ed.), 1999. "Handbook of Labor Economics," Handbook of Labor Economics, Elsevier, edition 1, volume 3, number 3.
    7. John Haltiwanger & Scott Schuh, 1999. "Gross job flows between plants and industries," New England Economic Review, Federal Reserve Bank of Boston, issue Mar, pages 41-64.
    8. Santos Raposo, P.M. & van Ours, J.C., 2008. "How Working Time Reduction Affects Employment and Earnings," Other publications TiSEM 1f9a2c0d-128d-4137-9bfa-e, Tilburg University, School of Economics and Management.
    9. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-In-Differences Estimates?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(1), pages 249-275.
    10. Calmfors, Lars & Hoel, Michael, 1988. " Work Sharing and Overtime," Scandinavian Journal of Economics, Wiley Blackwell, vol. 90(1), pages 45-62.
    11. Davis, Steven J. & Haltiwanger, John, 1999. "Gross job flows," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 41, pages 2711-2805, Elsevier.
    12. Marimon, Ramon & Zilibotti, Fabrizio, 2000. "Employment and distributional effects of restricting working time," European Economic Review, Elsevier, vol. 44(7), pages 1291-1326, June.
    13. Raposo, Pedro S. & van Ours, Jan C., 2010. "How working time reduction affects jobs and wages," Economics Letters, Elsevier, vol. 106(1), pages 61-63, January.
    14. Bruno Crepon & Francis Kramarz, 2002. "Employed 40 Hours or Not Employed 39: Lessons from the 1982 Mandatory Reduction of the Workweek," Journal of Political Economy, University of Chicago Press, vol. 110(6), pages 1355-1389, December.
    15. Mikal Skuterud, 2007. "Identifying the Potential of Work-Sharing as a Job-Creation Strategy," Journal of Labor Economics, University of Chicago Press, vol. 25(2), pages 265-287.
    16. 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, May.
    17. repec:hal:spmain:info:hdl:2441/10198 is not listed on IDEAS
    18. Cardoso, Ana Rute, 2006. "Wage mobility: do institutions make a difference?," Labour Economics, Elsevier, vol. 13(3), pages 387-404, June.
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    1. Jean‐François Fagnart & Marc Germain & Bruno Van der Linden, 2023. "Working time reduction and employment in a finite world," Scandinavian Journal of Economics, Wiley Blackwell, vol. 125(1), pages 170-207, January.
    2. Sánchez, Rafael, 2013. "Do reductions of standard hours affect employment transitions?: Evidence from Chile," Labour Economics, Elsevier, vol. 20(C), pages 24-37.

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    More about this item

    Keywords

    workweek reduction; policy reform; employment dynamics; J22; J63; J81;
    All these keywords.

    JEL classification:

    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J81 - Labor and Demographic Economics - - Labor Standards - - - Working Conditions

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