Does Labor Legislation Benefit Workers? Well-Being after an Hours Reduction

42 Pages Posted: 12 Apr 2014

See all articles by Daniel S. Hamermesh

Daniel S. Hamermesh

University of Texas at Austin - Department of Economics; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

Daiji Kawaguchi

University of Tokyo - Graduate School of Economics

Jungmin Lee

FIU; IZA Institute of Labor Economics

Multiple version iconThere are 2 versions of this paper

Abstract

Are workers in modern economies working "too hard" – would they be better off if an equilibrium with fewer work hours were achieved? We examine changes in life satisfaction of Japanese and Koreans over a period when hours of work were cut exogenously because employers suddenly faced an overtime penalty that had become effective with fewer weekly hours per worker. Using repeated cross sections we show that life satisfaction in both countries may have increased relatively among those workers most likely to have been affected by the legislation. The same finding is produced using Korean longitudinal data. In a household model estimated over the Korean cross-section data we find some weak evidence that a reduction in the husband's work hours increased his wife's well-being. Overall these results are consistent with the claim that legislated reductions in work hours can increase workers' happiness.

Keywords: happiness, overtime work, rat-race

JEL Classification: J22, J23, J28

Suggested Citation

Hamermesh, Daniel S. and Kawaguchi, Daiji and Lee, Jungmin, Does Labor Legislation Benefit Workers? Well-Being after an Hours Reduction. IZA Discussion Paper No. 8077. Available at SSRN: https://ssrn.com/abstract=2424176

Daniel S. Hamermesh (Contact Author)

University of Texas at Austin - Department of Economics ( email )

Austin, TX 78712
United States
512-475-8526 (Phone)
512-471-3510 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Daiji Kawaguchi

University of Tokyo - Graduate School of Economics ( email )

Tokyo
Japan

Jungmin Lee

FIU ( email )

University Park
11200 SW 8th Street
Miami, FL 33199
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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