Working Time, Employment, and Work Sharing: Evidence from Sweden
Stockholm School of Economics Working Paper Series in Economics and Finance No. 135
Posted: 1 Jun 1998
Date Written: November 1996
We study three necessary conditions for work sharing to increase employment. First, there must exist a negative long-run relation between working time and employment. Second, hours per worker must be exogenous with respect to wages and employment. Third, policy makers must be able to influence actual hours per worker. We formulate a theoretical model for employment, hours per worker, production, and real wages. A VAR system with cointegrating constraints is estimated by maximum likelihood using Swedish private sector data 1970-1-1990:4. We find: 1) no long-run relation between hours per worker and employment, 2) that hours per worker are endogenous with respect to the estimation of long-run parameters, and 3) that legislated working time and hours per worker are related to each other in the long run.
JEL Classification: E24, J22, J23
Suggested Citation: Suggested Citation