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Working Time Regulation in a Search Economy with Worker Moral Hazard

Author

Listed:
  • Guillaume ROCHETEAU

Abstract

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.

Suggested Citation

  • Guillaume ROCHETEAU, 2000. "Working Time Regulation in a Search Economy with Worker Moral Hazard," Cahiers de Recherches Economiques du Département d'économie 00.06, Université de Lausanne, Faculté des HEC, Département d’économie.
    • Handle: RePEc:lau:crdeep:00.06
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    Cited by:

    1. Fella Giulio, 2012. "Matching, Wage Rigidities and Efficient Severance Pay," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 12(1), pages 1-35, December.
    2. Pierre Cahuc & André Zylberberg, 2008. "Reduction of working time and unemployment," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00255770, HAL.
    3. Rocheteau, Guillaume, 2001. "Equilibrium unemployment and wage formation with matching frictions and worker moral hazard," Labour Economics, Elsevier, vol. 8(1), pages 75-102, January.
    4. 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.
    5. Fabrice Gilles, 2015. "Evaluating the Impact of a Working Time Regulation on Capital Operating Time: The French 35-hour Work Week Experience," Scottish Journal of Political Economy, Scottish Economic Society, vol. 62(2), pages 117-148, May.
    6. Patrick Artus & Pierre Cahuc & André Zylberberg, 2007. "Réglementation du temps de travail, revenu et emploi," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00255820, HAL.
    7. Marimon, Ramon & Zilibotti, Fabrizio, 2000. "Employment and distributional effects of restricting working time," European Economic Review, Elsevier, vol. 44(7), pages 1291-1326, June.
    8. Been-Lon Chen & Chih-Fang Lai, 2016. "Relative effects of labor taxes on employment and working hours: role of mechanisms shaping working hours," Journal of Economics, Springer, vol. 117(1), pages 49-84, January.
    9. Camille Logeay & Sven Schreiber, 2006. "Testing the effectiveness of the French work-sharing reform: a forecasting approach," Applied Economics, Taylor & Francis Journals, vol. 38(17), pages 2053-2068.
    10. Arslan, Yavuz & Taskin, Temel, 2011. "Explaining the gender gaps in unemployment across OECD countries," MPRA Paper 34873, University Library of Munich, Germany.
    11. Norikazu Tawara, 2008. "No-shirking Conditions in Frictional Labor Markets," Economics Bulletin, AccessEcon, vol. 10(1), pages 1-10.
    12. Camille LOGEAY & Sven SCHREIBER, 2010. "Evaluating the Effectiveness of the French Work-Sharing Reform," EcoMod2004 330600093, EcoMod.
    13. Pauline Carry, 2022. "The Effects of the Legal Minimum Working Time on Workers, Firms and the Labor Market," Working Papers hal-04067393, HAL.
    14. Schreiber, Sven, 2008. "Did work-sharing work in France? Evidence from a structural co-integrated VAR model," European Journal of Political Economy, Elsevier, vol. 24(2), pages 478-490, June.
    15. Burdin, Gabriel & Kambayashi, Ryo & Kato, Takao, 2024. "The Impact of Overtime Limits on Firms and Workers: Evidence from Japan's Work Style Reform," IZA Discussion Papers 17583, Institute of Labor Economics (IZA).
    16. Pauline Carry, 2022. "The Effects of the Legal Minimum Working Time on Workers, Firms and the Labor Market," Sciences Po Economics Publications (main) hal-04067393, HAL.
    17. Antonio García Sánchez & María del Mar Vázquez Méndez, 2005. "The timing of work in a general equilibrium model with shiftwork," Investigaciones Economicas, Fundación SEPI, vol. 29(1), pages 149-179, January.
    18. repec:clr:wugarc:y:2016v:42i:04p:665 is not listed on IDEAS
    19. Philipp Poyntner, 2016. "Beschäftigungseffekte von Arbeitszeitverkürzung," Wirtschaft und Gesellschaft - WuG, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik, vol. 42(4), pages 665-684.
    20. Emilio Dom󹱵ez & Miren Ullibarri & Idoia Zabaleta, 2012. "Effects of reduction in working hours on a model with job creation and job destruction," Applied Economics, Taylor & Francis Journals, vol. 44(7), pages 917-932, March.
    21. Willington, Manuel & Navarro, Lucas, 2015. "Work hours regulation in a search economy with adverse selection," Economics Letters, Elsevier, vol. 136(C), pages 46-48.
    22. Fella Giulio, 2012. "Matching, Wage Rigidities and Efficient Severance Pay," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 12(1), pages 1-35, December.
    23. Jason E. Taylor, 2011. "Work‐sharing During the Great Depression: Did the ‘President's Reemployment Agreement’ Promote Reemployment?," Economica, London School of Economics and Political Science, vol. 78(309), pages 133-158, January.
    24. Altavilla, Carlo & Garofalo, Antonio & Vinci, Concetto Paolo, 2005. "Evaluating the effects of working hours on employment and wages," Journal of Policy Modeling, Elsevier, vol. 27(6), pages 647-664, September.

    More about this item

    Keywords

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    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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