How Working Time Reduction Affects Employment and Earnings

CentER Discussion Paper Series No. 2008-81

19 Pages Posted: 25 Sep 2008

See all articles by Pedro S. Raposo

Pedro S. Raposo

Tilburg University - Center for Economic Research (CentER)

Jan C. van Ours

Tilburg University - Department of Economics; University of Melbourne - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: September 23, 2008

Abstract

December 1, 1996 Portugal introduced a new law on working hours which gradually reduced the standard workweek from 44 hours to 40 hours. We study how this mandatory working hours reduction affected employment and earnings of workers involved. We find for workers who were affected by the new law that working hours decreased, while hourly wages increased, keeping monthly earnings approximately constant. We also find that the working hours reduction did not lead to an increased job loss of workers directly affected. Finally, we find that workers who themselves were not directly affected were influenced by the working hours reduction indirectly. If they worked in a firm with many workers working more than 40 hours before the change in law was introduced.

Keywords: Workweek reduction, policy reform, employment dynamics, earnings

JEL Classification: J22, J31, J63, J81

Suggested Citation

Raposo, Pedro S. and van Ours, Jan C., How Working Time Reduction Affects Employment and Earnings (September 23, 2008). CentER Discussion Paper Series No. 2008-81. Available at SSRN: https://ssrn.com/abstract=1273523 or http://dx.doi.org/10.2139/ssrn.1273523

Pedro S. Raposo (Contact Author)

Tilburg University - Center for Economic Research (CentER) ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Jan C. Van Ours

Tilburg University - Department of Economics ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands
+31 13 466 2880 (Phone)
+31 13 466 3042 (Fax)

University of Melbourne - Department of Economics ( email )

Melbourne, 3010
Australia

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