Sunday shop opening is deregulated to the municipal level in the Netherlands. Despite positive effects on economic growth and employment, many municipalities restrict Sunday shop opening. Based on 2003 data we show that diverse local characteristics, like the size of municipalities and religious and political affiliation, play a major role in decisions about Sunday shop opening. The evidence is consistent with the hypothesis that municipal control over Sunday shopping hours results in a considerable variation in policies. As this variation is related to significant differences between municipalities, reasons exist to decentralize the decision on Sunday shopping opening.Keywords: Sunday opening, economic regulation, decentralization.
Jel classification: D 78, L 51
I IntroductionIn the last years European countries regularly debate about relaxing shop opening hours legislation. As an outcome of this debate some legal restrictions have been relaxed for example in Sweden, the Netherlands and Germany. Since 1972 in Sweden opening hours are unrestricted for all stores. Until June 1996 Dutch shops were not allowed to be open on evenings and on Sundays, todayshops can be open from 6 to 22 hours and Sunday trading can be allowed 12 times a year (and on all Sundays in tourist regions). In Germany liberalization was decided in November 1996 changing closing time on weekdays from 18.30 to 20.00 and on Saturday from 14.00 to 16.00 hours.From an economic point of view strong arguments exist for a less tight regulation of shop opening hours. The fast growing empirical literature about this issue stresses unequivocally out more employment and welfare gains for consumers. Burda (2000) and Gradus (1996) show that many European countries consider deregulation relevant for the policy debate concerning unemployment and job creation.The economic literature points to substantial positive employment effects of longer opening hours, mainly due to an increase of threshold labour but possibly also as the result of increased sales as in Goos (2005), Gradus (1996) and Skuterud (2005). Moreover, liberalization results in markedly relaxed time constraints for consumers. The effect on prices is more doubtful. According to 1 Nooteboom (1983) and CPB (1995) average prices may increase or decrease, dependent on the sum of higher costs due to increased threshold labour. On the other hand, Thurik (1984) reasons that an increase in productivity as a result of higher capital utilization may induce lower costs. Tanguay et al. (1995) suggests on the basis of evidence from the 1990 liberalization in Quebec that mark-ups may increase and that prices rise. However, this evidence is rather weak as it is based on short term effects only. The evidence from Sweden and the US suggests that prices fell (Burda and Weil, 2001).Despite these positive economic effects most European countries still restrict opening on Sundays. In Germany, Norway and Switzerland opening is prohibited. Only in some countries, such as Ireland, Portugal, Sweden and the Uni...