Abstract
Worksharing is considered by many as a promising public policy to reduce unemployment. This paper reviews the most pertinent theoretical and recent empirical contributions to the literature on worksharing. Next, we provide new empirical evidence on this issue by a longitudinal cross-country analysis of the long-run effects of a reduction in working hours on employment and wages, exploiting aggregate data for 16 OECD countries. The conclusions of the theoretical literature survey are indecisive: the efficacy of worksharing as an employment enhancing policy tool depends heavily on the setting in which the analysis takes place. In line with recent empirical studies, our results do not support the proposition that worksharing promotes employment. The results show a positive direct effect on employment of a reduction in working hours. However, taking into account indirect effects, in particular the upward effects on wages, we find that the long-run effect becomes small and insignificant.
| Original language | English |
|---|---|
| Pages (from-to) | 293-313 |
| Number of pages | 21 |
| Journal | Labour Economics |
| Volume | 11 |
| Issue number | 3 |
| DOIs | |
| Publication status | Published - 1 Jan 2004 |
Funding
This paper grew out of the research project Working Time and Employment ( Arbeidsduur en Werkgelegenheid ), commissioned by the Netherlands Scientific Council for Government Policy ( Wetenschappelijke Raad voor het Regeringsbeleid ). The authors are grateful to Krijn van Beek of the Council, for fruitful discussions on different versions of this report. Comments on earlier versions by Rob Alessie and Klaas de Vos, and comments by Jan van Ours and two anonymous referees are also gratefully acknowledged. All correspondence to the first author: RAND, P.O. Box 2138, Santa Monica CA90407. Appendix A
Keywords
- Employment
- Hours of work
- Panel data
