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Reduction of working time and unemployment

Author

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  • Pierre Cahuc

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - X - École polytechnique - IP Paris - Institut Polytechnique de Paris - ENSAE Paris - École Nationale de la Statistique et de l'Administration Économique - CNRS - Centre National de la Recherche Scientifique)

  • André Zylberberg

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

Abstract

This paper analyzes the consequences of compulsory reductions in working time on employment. The first part of the paper is devoted to the analysis of labor demand when the firm chooses the number of jobs and hours. This framework allows us to show that compulsory reductions in standard hours can increase employment only if wage compensation is sufficiently low. Then, the second part of the paper looks at the determinants of wages, hours and employment in different frameworks: perfect competition, collective bargaining, monopsony. It is shown that regulation of hours is justified and can even increase employment when competition is imperfect. However, compulsory reductions in working hours cannot systematically improve employment and welfare.

Suggested Citation

  • Pierre Cahuc & André Zylberberg, 2008. "Reduction of working time and unemployment," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00255770, HAL.
    • Handle: RePEc:hal:cesptp:halshs-00255770
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00255770
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    References listed on IDEAS

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    1. Rocheteau, Guillaume, 2002. "Working time regulation in a search economy with worker moral hazard," Journal of Public Economics, Elsevier, vol. 84(3), pages 387-425, June.
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    Cited by:

    1. Lührmann, Melanie & Weiss, Matthias, 2010. "The effect of working time and labor force participation on unemployment: A new argument in an old debate," Economic Modelling, Elsevier, vol. 27(1), pages 67-82, January.
    2. Kentaro Asai, 2022. "Working Hour Reform, Labor Demand and Productivity," PSE Working Papers halshs-03728157, HAL.
    3. 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.
    4. Virginia Tsoukatou, 2019. "Examination of the Correlation between Working Time Reduction and Employment," Papers 1912.01605, arXiv.org.
    5. Vincent Charlet & Philippe Frocrain, 2017. "Les limites des allégements de charges sur les bas salaires," Working Papers hal-01695167, HAL.
    6. Kentaro Asai, 2022. "Working Hour Reform, Labor Demand and Productivity," Working Papers halshs-03728157, HAL.

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    Keywords

    working time; work sharing;

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