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Blue Laws

Author

Listed:
  • Michael C Burda

    (Institut für Wirtschaftstheorie - HU Berlin - Humboldt-Universität zu Berlin = Humboldt University of Berlin = Université Humboldt de Berlin)

  • Philippe Weil

    (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po)

Abstract

This paper investigates the economics of "blue laws" or restrictions on shop-opening hours, most commonly imposed on Sunday trading. We show that in the presence of communal leisure or "ruinous competition" externalities, retail regulations can have real effects in a simple general equilibrium model. We look for these effects in a panel of US states and in individual CPS data. An instrumental variable approach identifies the effects to the extent that blue laws are endogenous. We find that blue laws 1) reduce relative employment, 2) raise annual compensation and labor productivity, and 3) depress prices in the retail sector. The primary mechanism appears to be a reduction of part-time employment.

Suggested Citation

  • Michael C Burda & Philippe Weil, 2004. "Blue Laws," Working Papers hal-01065499, HAL.
    • Handle: RePEc:hal:wpaper:hal-01065499
    Note: View the original document on HAL open archive server: https://sciencespo.hal.science/hal-01065499
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    References listed on IDEAS

    as
    1. Kalyan K. Sanyal & Ronald W. Jones, 2018. "The Theory of Trade in Middle Products," World Scientific Book Chapters, in: International Trade Theory and Competitive Models Features, Values, and Criticisms, chapter 13, pages 203-231, World Scientific Publishing Co. Pte. Ltd..
    2. repec:bla:kyklos:v:50:y:1997:i:4:p:539-59 is not listed on IDEAS
    3. Marcel Thum & Alfons Weichenrieder, 1997. "Dinkies' and Housewives: The Regulation of Shopping Hours," Kyklos, Wiley Blackwell, vol. 50(4), pages 539-559, November.
    4. de Meza, David, 1984. "The Fourth Commandment: Is it Pareto Efficient?," Economic Journal, Royal Economic Society, vol. 94(374), pages 379-383, June.
    5. Clemenz, Gerhard, 1990. "Non-sequential consumer search and the consequences of a deregulation of trading hours," European Economic Review, Elsevier, vol. 34(7), pages 1323-1337, November.
    6. Raymond Gradus, 1996. "The economic effects of extending shop opening hours," Journal of Economics, Springer, vol. 64(3), pages 247-263, October.
    7. Tanguay, Georges & Vallee, Luc & Lanoie, Paul, 1995. "Shopping Hours and Price Levels in the Retailing Industry: A Theoretical and Empirical Analysis," Economic Inquiry, Western Economic Association International, vol. 33(3), pages 516-524, July.
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    More about this item

    Keywords

    blue laws; shop opening regulations; retail trade; employment;
    All these keywords.

    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce

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