Evaluating the Impact of a Working Time Regulation on Capital Operating Time: The French 35‐hour Work Week Experience

Gilles, Fabrice

doi:10.1111/sjpe.12067

Cited by 4 publications

(2 citation statements)

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“…This implies that there needs to be different policy responses to increased unemployment. Similar evidence concerning sectors impacted by the pandemic reported that the largest employment losses were in the leisure and hospitality sectors, in addition to other services, including trade, transportation, and utility services, and in general, sectors which were less able to make use of teleworking (Gilles 2015). The sectoral differences in crisis severity may also produce a widening gender gap, given the incidence of female employment in the most affected sectors (Gilles and L'Horty 2003).…”

Section: Pandemic Measures and Their Economic Impactmentioning

confidence: 82%

“…Longterm employment losses arose, caused by firms' definitive closures and difficulties in re-entering the labor market for many workers (Foss 1963). More losses are expected in low-wage and retail sectors, which is in contrast with the previous recession, where greater difficulties arose for the high-wage, construction, and manufacturing sectors (Gilles 2015). This implies that there needs to be different policy responses to increased unemployment.…”

Section: Pandemic Measures and Their Economic Impactmentioning

confidence: 95%

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Employment Support and COVID-19: Is Working Time Reduction the Right Tool?

2022

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The main objectives of this study are to take into account the effects of COVID-19 on labor market functioning, and to evaluate the effects of policies regarding working time reduction, in terms of both containing the spread of infection and economic activity. Accordingly, we describe a macroeconomic model wherein we test the effects of reducing working hours in the Keynesian unemployment framework, which comprises a fixed prices and wages regime, and a consumption demand that is dependent on salaries and autonomous demand components. Moreover, we also describe a neoclassical unemployment framework, wherein the labor market is only governed by dynamic demand forces. Theoretical results show that, according to the epidemiological phase, a reduction in working hours may be a good policy for containing the virus and improving employment in the Keynesian framework when established conditions are maintained. In the neoclassical framework, a work sharing policy will fail if some conditions do not occur, and it could cause an increase in the spread of the virus when a reduction of epidemic containment measures occurs. Employment will increase when the pandemic ends. A numerical simulation confirms that a reduction in working hours could reduce virus diffusion, but only under established, constrained parameters in both frameworks.

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Section: Pandemic Measures and Their Economic Impactmentioning

confidence: 82%

Section: Pandemic Measures and Their Economic Impactmentioning

confidence: 95%

Employment Support and COVID-19: Is Working Time Reduction the Right Tool?

2022

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Challenging the working time reduction and wages trade-off: a simulation for the Spanish economy

Rey

Villanueva²

2021

Cambridge Journal of Economics

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This paper analyzes the effect of working time reduction (WTR) on the Spanish economy. Using microdata from the Economically Active Population Survey (EAPS) and the Wage Structure Survey (WSS), we estimate the changes in employment, worked hours, wages and salaries, and the labour share driven by a 5-hour reduction of the ordinary work week in full-time contracts (from 40 hours to 35 hours), without a wage reduction. According to our results, this WTR would mean the liberation of private sector hours that are equivalent to 1.2 million full-time jobs. To calculate job creation, we consider the occupations and technical conditions of production (based on the European Working Conditions Survey). Consequently, had the WTR taken place in 2017, it would have created 560 thousand jobs, thus causing the unemployment rate to fall by 2.6 p.p. Moreover, women are found to be the group most affected by this measure. As for the effect on wages, these would have increased by 3.7%, implying a labour share increase of 2.1 p.p. Finally, we study the macroeconomic effects, through an extended version of the single-equations Bhaduri–Marglin model using quarterly data from 1995Q1 until 2017Q4. Our results show that a WTR of 5 hours leads to an increase of 1.4% in GDP.

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