The Effects of Shop Opening Hours Deregulation: Evidence from Italy

Abstract

We estimate the effects of the deregulation of shop opening hours on the market structure of the retail sector and on the size and composition of the labour force employed there. To identify these effects, we exploit the staggered implementation of a reform that allowed Italian municipalities to adopt fully flexible opening hours in the late 1990s. Our findings indicate that the possibility of opening shops 24/7 increased employment in the retail sector by about three per cent and raised the number of shops in the affected municipalities by about two per cent. The effects were concentrated amongst workers employed in larger commercial outlets that were better able to exploit the flexibility introduced by the new regime. An analysis of individual-level evidence suggests that the deregulation also produced a recomposition of employment towards regular employees rather than self-employed workers.

Keywords: regulation, retail sector, employment

JEL Classification: J21, K20, L51, L81