Employed 40 Hours or Not Employed 39: Lessons from the 1982 Mandatory Reduction of the Workweek

Abstract

We investigate the effects of the February 1, 1982, mandatory reduction of weekly working hours in France. Just after Francois Mitterrand's election in 1981, the minimum wage was increased by 5 percent. The workweek was then reduced from 40 to 39 hours. At the same time, stable monthly earnings for minimum-wage earners were mandated. We show that workers employed 40 hours and above in March 1981 were more likely to lose their jobs between 1981 and 1982 than workers employed 36-39 hours in March 1981. Moreover, many workers were still working 40 hours after February. These workers were also strongly affected by this reduction. Our estimates of the impact of this one-hour reduction on employment losses vary between 2 percent and 4 percent. Minimum-wage workers were most affected by the changes.