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- Title
The Employment Effects of a Shorter Working Week .
- Authors
Booth, Alison; Schiantarelli, Fabio
- Abstract
Labor organizations are currently arguing that a reduction in the standard working week will help the high unemployment of the 1980s. Opponents are arguing that this will increase labor costs, and therefore will not alleviate unemployment. The purpose of this paper is to analyze the employment effects of a cut in hours, using the monopoly union and efficient bargaining models of the union and the firm. Under various developments of the models, the results are quite consistent: the reduction in hours, keeping the number of shifts fixed, has employment effects that are ambiguous, and in our view are likely to be negative for plausible values of the crucial parameters. A puzzle remains as to why trade unions are pressing for shorter hours when the effects on employment, and possibly on union utility, are likely to be negative. <BR> The paper represents an attempt to model the employment effects of a shorter working week, in order to see if such a policy could help alleviate the high unemployment characterizing the United Kingdom and many other European countries in the 1980s. The general conclusion of our analysis is that the employment effects of a reduction in hours are ambiguous, and in our view, likely to be negative. Unless the cuts in hours are accompanied by policy measures that alleviate labor costs for firms, or by a general trend rise in productivity, unfavorable employment consequences will probably be generated. However, it is possible that more optimistic conclusions might be reached in situations where the reduction in hours allows the introduction of additional shifts, and thus permits a fuller utilization of capacity. This is an issue that deserves further investigation, as does also the puzzle implicit in the predictions of these union models: why are real-world trade unions pushing for shorter hours when the predicted employment effects, and sometimes the effects on union utility, are likely to be negative? Are unions acting irrationally, or do...
- Subjects
WORKING hours; UNEMPLOYMENT; LABOR costs; LABOR unions; EMPLOYMENT; INDUSTRIAL costs
- Publication
Economica, 1987, Vol 54, Issue 214, p237
- ISSN
0013-0427
- Publication type
Article
- DOI
10.2307/2554393