Working Time, Employment, and Work Sharing: Evidence from Sweden
We study three necessary conditions for work sharing to increase employment. First, there must exist a negative long-run relation between working time and employment. Second, hours per worker must be exogenous with respect to wages and employment. Third, policy makers must be able to influence actual hours per worker. We formulate a theoretical model for employment, hours peer worker, production, and real wages. A VAR system with cointegrating constraints is estimated by maximum likelihood using Swedish private sector data 1970-1- 1990:4 We find (I) no long-run relation between hours per worker and employment, (II) that hours per worker are endogenous with respect to the estimation of long-run parameters, and (III) that legislated working time and hours per worker are related to each other in the long run.
|Date of creation:||Nov 1996|
|Date of revision:|
|Publication status:||Published in Empirical Economics, 2000, pages 169-187.|
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- Johansen, Søren & Juselius, Katarina, 1992. "Testing structural hypotheses in a multivariate cointegration analysis of the PPP and the UIP for UK," Journal of Econometrics, Elsevier, vol. 53(1-3), pages 211-244.
- Jennifer Hunt, 1998. "Hours Reductions as Work-Sharing," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 29(1), pages 339-381.
- Søren Johansen & Katarina Juselius, 1992.
"Identification of the Long-Run and the Short-Run Structure: An Application to the ISLM Model,"
92-04, University of Copenhagen. Department of Economics.
- Johansen, Soren & Juselius, Katarina, 1994. "Identification of the long-run and the short-run structure an application to the ISLM model," Journal of Econometrics, Elsevier, vol. 63(1), pages 7-36, July.
- Pencavel, John & Holmlund, Bertil, 1988. "The Determination of Wages, Employment, and Work Hours in an Economy with Centralised Wage-Setting: Sweden, 1950-83," Economic Journal, Royal Economic Society, vol. 98(393), pages 1105-26, December.
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- Hunt, Jennifer, 1997.
"Has Work Sharing Worked in Germany?,"
CEPR Discussion Papers
1553, C.E.P.R. Discussion Papers.
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"Stochastic Trends and Economic Fluctuations,"
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American Economic Association, vol. 81(4), pages 819-40, September.
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- Tom Doan, . "RATS programs to replicate King, Plosser, Stock, Watson AER 1991 results," Statistical Software Components RTZ00107, Boston College Department of Economics.
- Robert G. King & Charles I. Plosser & James H. Stock & Mark W. Watson, 1987. "Stochastic Trends and Economic Fluctuations," NBER Working Papers 2229, National Bureau of Economic Research, Inc.
- Johansen, Soren, 1991. "Estimation and Hypothesis Testing of Cointegration Vectors in Gaussian Vector Autoregressive Models," Econometrica, Econometric Society, vol. 59(6), pages 1551-80, November.
- Freeman, Richard B, 1995. "The Large Welfare State as a System," American Economic Review, American Economic Association, vol. 85(2), pages 16-21, May.
- Jennifer Hunt, 1996. "The Response of Wages and Actual Hours Worked to the Reductions of Standard Hours," NBER Working Papers 5716, National Bureau of Economic Research, Inc.
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