Working Time Regulation in a Search Economy with Worker Moral Hazard
This paper analyzes the consequences of a working time reduction within a matching model with worker moral hazard. In the "laissez faire", workers and employers bargain over wages and working hours. When the no-shirking condition (NSC) is binding, the number of working hours is lower than the level that would be negotiated in the case of perfect monitoring and a work-sharing policy increases aggregate employment. At the opposite, for low unemployment countries, the NSC does not bind and a working time regulation always worsens the labour market situation.
|Date of creation:||Jan 2000|
|Date of revision:|
|Publication status:||Published in Journal of Public Economics, vol. 84 (3), June 2002, pp. 387-425|
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