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Employment and Hours of Work

Author

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  • Noritaka Kudoh

    (Department of Economics, Hokkaido University)

  • Masaru Sasaki

    (Department of Economics, Osaka University)

Abstract

This paper develops a dynamic model of the labor market in which the degree of substitution between employment and hours of work is determined as part of a search equilibrium. Each firm chooses the demand for working hours and the number of vacancies, and the hourly wage rate is determined by Nash bargaining. A firm increases the demand for hours as recruitment becomes more costly. Labor market tightness influences the composition of labor demand through its impact on the wage rate. Restricting working hours can expand employment, but doing so is not necessarily efficient. When there are two industries that differ in their equipment costs, workers employed by firms with higher equipment costs work longer and earn more.

Suggested Citation

  • Noritaka Kudoh & Masaru Sasaki, 2007. "Employment and Hours of Work," Discussion Papers in Economics and Business 07-35, Osaka University, Graduate School of Economics.
    • Handle: RePEc:osk:wpaper:0735
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Russell Cooper, 2017. "The Employment and Output Effects of Short-Time Work in Germany," 2017 Meeting Papers 613, Society for Economic Dynamics.
    2. Krolikowski, Pawel M. & McCallum, Andrew H., 2021. "Goods-market frictions and international trade," Journal of International Economics, Elsevier, vol. 129(C).
    3. Noritaka Kudoh & Hiroaki Miyamoto & Masaru Sasaki, 2019. "Employment and Hours over the Business Cycle in a Model with Search Frictions," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 31, pages 436-461, January.
    4. Etienne Lalé, 2019. "Search and Multiple Jobholding," Upjohn Working Papers 19-305, W.E. Upjohn Institute for Employment Research.
    5. Dossche, Maarten & Lewis, Vivien & Poilly, Céline, 2019. "Employment, hours and the welfare effects of intra-firm bargaining," Journal of Monetary Economics, Elsevier, vol. 104(C), pages 67-84.
    6. Noritaka Kudoh & Hiroaki Miyamoto, 2021. "General Equilibrium Effects and Labor Market Fluctuations," Working Papers SDES-2021-4, Kochi University of Technology, School of Economics and Management, revised May 2021.
    7. Miyamoto Hiroaki, 2016. "Growth and non-regular employment," The B.E. Journal of Macroeconomics, De Gruyter, vol. 16(2), pages 523-554, June.
    8. Chun-Hung Kuo & Hiroaki Miyamoto, 2016. "Unemployment and Wage Rigidity in Japan: A DSGE Model Perspective," Working Papers EMS_2016_06, Research Institute, International University of Japan.
    9. Hiroaki Miyamoto, 2016. "Uncertainty shocks and labor market dynamics in Japan," Working Papers SDES-2016-8, Kochi University of Technology, School of Economics and Management, revised Jun 2016.
    10. Kudoh, Noritaka & Miyamoto, Hiroaki, 2023. "Do general equilibrium effects matter for labor market dynamics?," Economic Modelling, Elsevier, vol. 119(C).
    11. Kawata, Keisuke, 2015. "Work hour mismatches and on-the-job search," Economic Modelling, Elsevier, vol. 47(C), pages 280-291.
    12. Kosho Tanaka, 2018. "Technological progress, firm selection, and unemployment," Economics Bulletin, AccessEcon, vol. 38(1), pages 431-442.
    13. Etienne Lale, 2022. "Search and Multiple Jobholding," Working Papers 22-07, Chair in macroeconomics and forecasting, University of Quebec in Montreal's School of Management.

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    More about this item

    Keywords

    employment; hours of work; search frictions.;
    All these keywords.

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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