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Sinking the Blues: the Impact of Shop Closing Hours on Labor and Product Markets

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  • Maarten Goos

Abstract

There is a growing consensus among economists that extending shop opening hours createsjobs. While this is probably true in deregulating industries, this paper argues there are somedeficiencies in the existing hypotheses about how exactly deregulation affects employment.First, this paper exploits recent changes in Sunday Closing Laws in the US to find that totalemployment, total revenue and the number of shops increase in deregulating industries andpossibly decrease in non-deregulating industries. Second, a model assuming consumers likeshopping on Sunday, monopolistic competition and low barriers to entry is presented to showhow consumer behavior and retail competition can explain the observed impact ofderegulation on retail labor and product markets and therefore ultimately employment.

Suggested Citation

  • Maarten Goos, 2004. "Sinking the Blues: the Impact of Shop Closing Hours on Labor and Product Markets," CEP Discussion Papers dp0664, Centre for Economic Performance, LSE.
    • Handle: RePEc:cep:cepdps:dp0664
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    File URL: https://cep.lse.ac.uk/pubs/download/dp0664.pdf
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    References listed on IDEAS

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    1. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June.
    2. Inderst, Roman & Irmen, Andreas, 2005. "Shopping hours and price competition," European Economic Review, Elsevier, vol. 49(5), pages 1105-1124, July.
    3. Nooteboom, Bart, 1982. "A new theory of retailing costs," European Economic Review, Elsevier, vol. 17(2), pages 163-186.
    4. Marianne Bertrand & Francis Kramarz, 2002. "Does Entry Regulation Hinder Job Creation? Evidence from the French Retail Industry," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 117(4), pages 1369-1413.
    5. Alan B. Krueger & Jorn-Steffen Pischke, 1997. "Observations and Conjectures on the U.S. Employment Miracle," Working Papers 769, Princeton University, Department of Economics, Industrial Relations Section..
    6. Raymond Gradus, 1996. "The economic effects of extending shop opening hours," Journal of Economics, Springer, vol. 64(3), pages 247-263, October.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Marta Borowska-Stefańska & Michał Kowalski & Anna Majewska & Szymon Wiśniewski, 2022. "Changes in Costs Incurred by Car Users of the Local Transport System Due to the Implementation of Sunday Retail Restrictions," Sustainability, MDPI, vol. 14(20), pages 1-12, October.
    2. Paul, Annemarie, 2015. "After work shopping? Employment effects of a deregulation of shop opening hours in the German retail sector," European Economic Review, Elsevier, vol. 80(C), pages 329-353.
    3. Nooteboom, B., 2005. "The Industrial and Social Dynamics of Retailing, and Effects of Opening Hours," Other publications TiSEM db8e5df2-f7f4-42c4-9e2b-1, Tilburg University, School of Economics and Management.
    4. Nooteboom, B., 2005. "The social and industrial dynamics of retailing an evolutionary reconstruction," Discussion Paper 2005-48, Tilburg University, Center for Economic Research.
    5. Bossler, Mario & Oberfichtner, Michael, 2014. "The employment effect of deregulating shopping hours: Evidence from German retailing," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100506, Verein für Socialpolitik / German Economic Association.
    6. Dominique Goux & Eric Maurin, 2022. "Who will work on Sunday? The winners and losers of Sunday laws relaxation," Working Papers halshs-03884675, HAL.
    7. Lucia Rizzica & Giacomo Roma & Gabriele Rovigatti, 2020. "The effects of shop opening hours deregulation: evidence from Italy," Temi di discussione (Economic working papers) 1281, Bank of Italy, Economic Research and International Relations Area.
    8. Danchev, Svetoslav & Genakos, Christos, 2015. "Evaluating the impact of Sunday trading deregulation," LSE Research Online Documents on Economics 61156, London School of Economics and Political Science, LSE Library.
    9. Senftleben-König, Charlotte, 2014. "Product Market Deregulation and Employment Outcomes: Evidence from the German Retail Sector," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100539, Verein für Socialpolitik / German Economic Association.
    10. repec:hum:wpaper:sfb649dp2014-013 is not listed on IDEAS
    11. Charlotte Senftleben-König, "undated". "Product Market Deregulation and Employment Outcomes: Evidence from the German Retail Sector," BDPEMS Working Papers 2014009, Berlin School of Economics.
    12. Senftleben-König, Charlotte, 2014. "Product market deregulation and employment outcomes: Evidence from the German retail sector," SFB 649 Discussion Papers 2014-013, Humboldt University Berlin, Collaborative Research Center 649: Economic Risk.

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    More about this item

    Keywords

    Shop opening hours; labor demand; organization of retail markets;
    All these keywords.

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce

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