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Reducing working hours: a general equilibrium analysis

  • Terry J. Fitzgerald

An examination of the effects of restricting the weekly hours of workers in a heterogeneous-agent, general-equilibrium framework. The main findings are that restricting weekly hours increases employment substantially, but may also lead to large declines in wages, productivity, output, and consumption, and can increase the wage disparity between skilled and unskilled workers.

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Paper provided by Federal Reserve Bank of Cleveland in its series Working Paper with number 9801.

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Date of creation: 1998
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Handle: RePEc:fip:fedcwp:9801
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  1. Hoel, Michael, 1986. "Employment and Allocation Effects of Reducing the Length of the Workday," Economica, London School of Economics and Political Science, vol. 53(29), pages 75-85, February.
  2. Richard Rogerson, 2010. "Indivisible Labor, Lotteries and Equilibrium," Levine's Working Paper Archive 250, David K. Levine.
  3. Edward C Prescott & Robert M Townsend, 1997. "General Competitive Analysis in an Economy with Private Information," Levine's Working Paper Archive 1578, David K. Levine.
  4. Terry J. Fitzgerald, 1996. "Work schedules, wages, and employment in a general equilibrium model with team production," Working Paper 9613, Federal Reserve Bank of Cleveland.
  5. Andreas Hornstein & Edward C. Prescott, 1989. "The firm and the plant in general equilibrium theory," Staff Report 126, Federal Reserve Bank of Minneapolis.
  6. Booth, Alison & Schiantarelli, Fabio, 1987. "The Employment Effects of a Shorter Working Week," Economica, London School of Economics and Political Science, vol. 54(214), pages 237-48, May.
  7. Calmfors, Lars, 1985. "Work sharing, employment and wages," European Economic Review, Elsevier, vol. 27(3), pages 293-309.
  8. Hart, Robert A., 1984. "Worksharing and factor prices," European Economic Review, Elsevier, vol. 24(2), pages 165-188, March.
  9. FitzRoy, Felix R & Hart, Robert A, 1985. "Hours, Layoffs and Unemployment Insurance Funding: Theory and Practice in an International Perspective," Economic Journal, Royal Economic Society, vol. 95(379), pages 700-713, September.
  10. Per Krusell & Lee E. Ohanian & JosÈ-Victor RÌos-Rull & Giovanni L. Violante, 2000. "Capital-Skill Complementarity and Inequality: A Macroeconomic Analysis," Econometrica, Econometric Society, vol. 68(5), pages 1029-1054, September.
  11. Juster, F. Thomas & Stafford, Frank P., 1990. "The Allocation of Time: Empirical Findings, Behavioural Models, and Problems of Measurement," Working Paper Series 258, Research Institute of Industrial Economics.
  12. Terry J. Fitzgerald, 1996. "Reducing working hours," Economic Review, Federal Reserve Bank of Cleveland, issue Q IV, pages 13-22.
  13. Calmfors, Lars & Hoel, Michael, 1989. "Work Sharing, Employment and Shiftwork," Oxford Economic Papers, Oxford University Press, vol. 41(4), pages 758-73, October.
  14. Calmfors, Lars & Hoel, Michael, 1988. " Work Sharing and Overtime," Scandinavian Journal of Economics, Wiley Blackwell, vol. 90(1), pages 45-62.
  15. Terry J. Fitzgerald, 1996. "Reducing working hours: American workers' salvation?," Economic Commentary, Federal Reserve Bank of Cleveland, issue Sep.
  16. M. S. Feldstein, 1967. "Specification of the Labour Input in the Aggregate Production Function," Review of Economic Studies, Oxford University Press, vol. 34(4), pages 375-386.
  17. Yoram Barzel, 1973. "The Determination of Daily Hours and Wages," The Quarterly Journal of Economics, Oxford University Press, vol. 87(2), pages 220-238.
  18. Hoel, Michael & Vale, Bent, 1986. "Effects on unemployment of reduced working time in an economy where firms set wages," European Economic Review, Elsevier, vol. 30(5), pages 1097-1104, October.
  19. Hansen, Gary D., 1985. "Indivisible labor and the business cycle," Journal of Monetary Economics, Elsevier, vol. 16(3), pages 309-327, November.
  20. Walter Y. Oi, 1962. "Labor as a Quasi-Fixed Factor," Journal of Political Economy, University of Chicago Press, vol. 70, pages 538.
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