IDEAS home Printed from https://ideas.repec.org/p/zbw/kdifor/267.html

The Impact of a Workweek Reduction on Labor Productivity

Author

Listed:
  • Park, Yoonsoo
  • Park, Wooram

Abstract

- Estimating the causal effect of the standard 40-hour workweek policy (2004-11) on the annual output per worker showed an increase of 1.5% at manufacturing establishments with 10-plus employees. - The policy reduced the standard workweek from 44 to 40 hours and was gradually implemented in establishments according to size and industry. - Tentative but suggestive evidence was found that the potential mechanism through which the output per worker increased was owed to the improved efficiency in the production process rather than to the growth in capital input, implying that working hours were inefficiently long before the reduction. - Future policies aiming to reduce working hours should focus on identifying and amending systems and incentive mechanisms that promote inefficient overtime. - Current laws related to maximum working hours and overtime premiums are ambiguous and thus need to be clarified. - Wage structures should be revised to encourage employees to work more efficiently, in a shorter time. Specifically, worker compensation should be based on output (e.g. performance) rather than input (e.g. working hours) and the current high level of the overtime premium should be adjusted.

Suggested Citation

  • Park, Yoonsoo & Park, Wooram, 2017. "The Impact of a Workweek Reduction on Labor Productivity," KDI Policy Forum 267, Korea Development Institute (KDI).
    • Handle: RePEc:zbw:kdifor:267
    DOI: 10.22740/kdi.forum.e.2017.267
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/200910/1/kdi-pol-forum-267.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22740/kdi.forum.e.2017.267?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Taehyun Ahn, 2016. "Reduction of Working Time: Does It Lead to a Healthy Lifestyle?," Health Economics, John Wiley & Sons, Ltd., vol. 25(8), pages 969-983, August.
    2. Lee, Jungmin & Lee, Yong-Kwan, 2016. "Can working hour reduction save workers?," Labour Economics, Elsevier, vol. 40(C), pages 25-36.
    3. James Levinsohn & Amil Petrin, 2003. "Estimating Production Functions Using Inputs to Control for Unobservables," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 70(2), pages 317-341.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. WooRam Park & Yoonsoo Park, 2019. "When Less is More: The Impact of the Regulation on Standard Workweek on Labor Productivity in South Korea," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 38(3), pages 681-705, June.
    2. Miki Kohara & Taisei Noda, 2023. "The causal effects of working time on mental health: The effectiveness of the law reform raising the overtime wage penalty," Pacific Economic Review, Wiley Blackwell, vol. 28(5), pages 638-664, December.
    3. Hyun Ju Kim & Hye Myung Lee & Heejoo Cheon & Hansoo Ko, 2023. "Differential impacts of reduced worktime on work-life balance in Korea," PLOS ONE, Public Library of Science, vol. 18(11), pages 1-17, November.
    4. David Bautz & Maximilian Gödl & Timo Wollmershäuser, 2026. "A model-based analysis of the macroeconomic effects of a change in weekly working hours in Germany," ifo Forschungsberichte, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 161, February.
    5. Stéphane Carcillo & Alexander Hijzen & Stefan Thewissen, 2024. "The limitations of overtime limits to reduce long working hours: Evidence from the 2018 to 2021 working time reform in Korea," British Journal of Industrial Relations, London School of Economics, vol. 62(1), pages 98-126, March.
    6. Terhi Ravaska, 2023. "Do reduced working hours for older workers have health consequences and prolong work careers?," Working Papers 6, Finnish Centre of Excellence in Tax Systems Research.
    7. Ravaska, Terhi, 2023. "Do reduced working hours for older workers have health consequences and prolong work careers?," Working Papers 153, VATT Institute for Economic Research.
    8. repec:ces:ceswps:_10716 is not listed on IDEAS
    9. Tianjiao Zhao & Xiang Xiao & Qinghui Dai, 2021. "Transportation Infrastructure Construction and High-Quality Development of Enterprises: Evidence from the Quasi-Natural Experiment of High-Speed Railway Opening in China," Sustainability, MDPI, vol. 13(23), pages 1-23, December.
    10. Laura Hospido & Eva Moreno-Galbis, 2015. "The Spanish productivity puzzle in the Great Recession," Working Papers 1501, Banco de España.
    11. Anna M. Ferragina & Giulia Nunziante, 2018. "Are Italian firms performances influenced by innovation of domestic and foreign firms nearby in space and sectors?," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 45(3), pages 335-360, September.
    12. Vu Hoang Duong & Tuong Phi Vinh, 2024. "Spillover effects of Japanese firms and the role of absorptive capacity in Vietnam," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 38(2), pages 22-41, November.
    13. Massimo Colombo & Annalisa Croce & Samuele Murtinu, 2014. "Ownership structure, horizontal agency costs and the performance of high-tech entrepreneurial firms," Small Business Economics, Springer, vol. 42(2), pages 265-282, February.
    14. Ma, Yongfan & Hu, Xingcun, 2024. "Shadow banking and SME investment: Evidence from China's new asset management regulations," International Review of Economics & Finance, Elsevier, vol. 93(PA), pages 332-349.
    15. Jack Rossbach & Jose Asturias, 2017. "Misallocation in the Presence of Multiple Production Technologies," 2017 Meeting Papers 1094, Society for Economic Dynamics.
    16. Roberto Martino & Phu Nguyen-Van, 2014. "Labour market regulation and fiscal parameters: A structural model for European regions," Working Papers of BETA 2014-19, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    17. Francisco Javier Forcadell & Fernando Úbeda, 2022. "Individual entrepreneurial orientation and performance: the mediating role of international entrepreneurship," International Entrepreneurship and Management Journal, Springer, vol. 18(2), pages 875-900, June.
    18. Zhu, Ling & Liu, Shasha & Kong, Dongmin, 2023. "Governments' fiscal stress and firm decentralization," International Review of Financial Analysis, Elsevier, vol. 90(C).
    19. Ariu, Andrea & Breinlich, Holger & Corcos, Gregory & Mion, Giordano, 2019. "The interconnections between services and goods trade at the firm-level," Journal of International Economics, Elsevier, vol. 116(C), pages 173-188.
    20. Jan De Loecker & Jozef Konings, 2003. "Creative Destruction and Productivity Growth in an Emerging Economy Evidence from Slovenian Manufacturing," LICOS Discussion Papers 13803, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
    21. Weili Li, 2025. "RETRACTED ARTICLE: Optimizing Enterprise Productivity in the Digital Economy: A Genetic Algorithm and Multi-Objective Approach," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 16(1), pages 2670-2688, March.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:kdifor:267. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/kdiiikr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.