Workweek Flexibility and Hours Variation

37 Pages Posted: 19 Dec 2004

See all articles by Andrew Figura

Andrew Figura

Board of Governors of the Federal Reserve System - Macroeconomic Analysis Section

Date Written: October 2004

Abstract

I use the term workweek flexibility to describe the ease of changing output by altering the number of hours per worker. Despite the fact that workweek flexibility is potentially important for understanding the cyclical behavior of marginal cost and prices, as well as cyclical movements in hours and output, it has received little attention. Using insights from a simple model of employment and the workweek, I use mean workweek levels to identify the effect of workweek flexibility and then show that it is an important determinant of firms' marginal cost schedules and the variance of industry workweeks and hours. I use the same identification scheme with panel data to see if an increase in workweek flexibility has been behind the rise in hours per worker over the past 30 years and find that it has not.

Keywords: Workweek, hours adjustment

JEL Classification: E24, J23

Suggested Citation

Figura, Andrew, Workweek Flexibility and Hours Variation (October 2004). Available at SSRN: https://ssrn.com/abstract=633204 or http://dx.doi.org/10.2139/ssrn.633204

Andrew Figura (Contact Author)

Board of Governors of the Federal Reserve System - Macroeconomic Analysis Section ( email )

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