Calendrier du 26 octobre 2023
brown bag Travail et Économie Publique
Du 26/10/2023 de 12:30 à 13:30
PSE- 48 boulevard Jourdan, 74014 Paris, salle R1-09
ASAI Kentaro (PSE)
Firm-Level Effects of Reductions in Working Hours
This paper explores how legislative reduction in working hours impacts firms. We exploit the Portuguese transition to the 40-hour week in the 1990s, when Portugal gradually began to reduce the length of the standard working week by means of collective agreement, and then suddenly decrease it to 40 as the result of an election. We show that firms that did not adjust voluntarily hours before the reform were experiencing higher labor demand in the pre-reform period, and then decreased both employment and output. We argue this is the result of increased labor cost, as nominal salaries did not adjust and hourly wages rose. Moreover, we show that firms in collective agreements that autonomously adjusted their hours prior to the reform had a relatively stagnant labor demand, and did not experience employment and output losses relative to unaffected firms, despite a similar increase in the labor cost.