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When Less is More: The Impact of the Regulation on Standard Workweek on Labor Productivity in South Korea

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  • WooRam Park
  • Yoonsoo Park

Abstract

This paper examines the impact of a workweek reduction policy on the labor productivity of manufacturing plants in Korea. Taking advantage of the stepwise introduction of the standard 40‐hour workweek in Korea, we apply a difference‐in‐differences framework to individual‐level cross‐sectional and plant‐level longitudinal data to examine the impact of the policy on working hours and output, respectively. We find that the policy reduced per‐worker hours but increased per‐worker output, which is robust to various specifications and sample restrictions. The observed increase in per‐worker output is likely to be mediated through the increase in the total factor productivity and the amount of capital stock.

Suggested Citation

  • WooRam Park & Yoonsoo Park, 2019. "When Less is More: The Impact of the Regulation on Standard Workweek on Labor Productivity in South Korea," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 38(3), pages 681-705, June.
    • Handle: RePEc:wly:jpamgt:v:38:y:2019:i:3:p:681-705
    DOI: 10.1002/pam.22136
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    References listed on IDEAS

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    Cited by:

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    3. Stéphane Carcillo & Alexander Hijzen & Stefan Thewissen, 2024. "The limitations of overtime limits to reduce long working hours: Evidence from the 2018 to 2021 working time reform in Korea," British Journal of Industrial Relations, London School of Economics, vol. 62(1), pages 98-126, March.
    4. Tai Lee, 2022. "The Impact of Employment Protection on the Probability of Job Separation: Evidence from Job Duration Data in South Korea," Journal of Labor Research, Springer, vol. 43(3), pages 369-414, December.
    5. Taehyun Ahn, 2022. "Workweek reduction and women's job turnover: Evidence from labor legislation in South Korea," Economic Inquiry, Western Economic Association International, vol. 60(4), pages 1607-1625, October.
    6. DeVaro, Jed, 2024. "Work Schedules," IZA Discussion Papers 17061, Institute of Labor Economics (IZA).
    7. Hyuncheol Bryant Kim & Hyunseob Kim & John Zhu, 2022. "The Selection Effects of Part-Time Work: Experimental Evidence from a Large-Scale Recruitment Drive," Working Paper Series WP 2022-51, Federal Reserve Bank of Chicago.
    8. Hyun Ju Kim & Hye Myung Lee & Heejoo Cheon & Hansoo Ko, 2023. "Differential impacts of reduced worktime on work-life balance in Korea," PLOS ONE, Public Library of Science, vol. 18(11), pages 1-17, November.

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