Alexandra Roulet, INSEAD

"Do working time reductions share work? Evidence from the 35hours workweek reform in France" 

Abstract

Reductions of the full-time workweek have been introduced widely and are actively debated in several countries. These policies target either (i) workers’ welfare, hence assuming that workers keep their job and income, or (ii) firms’ organization, aiming at worksharing. This paper provides a comprehensive assessment of the causal effects of reducing the full-time workweek on workers and firms and quantifies worksharing. We study the 4-hour reduction in the workweek implemented in France in 2000, from 39 to 35 hours. We rely on difference-in-difference and regression discontinuity designs, as well as administrative employment records and balance sheet data. We leverage the fact that firms smaller than 20 employees had to comply with the new working time later than larger firms. While the distribution of hours worked changed drastically following the reform, we find little evidence of worksharing, with some heterogeneity by types of firms and workers. The reduction of hours at the worker level translates into a reduction in total hours at the firm level, by 5%. Despite the policy requiring unchanged monthly earnings, we estimate a reduction in workers’ total wages of 2%.

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Contact person: Kristoffer Balle Hvidberg