Can a Shorter Workweek Induce Higher Employment? Mandatory Reductions in the Workweek and Employment Subsidies |
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| Author:
| Erbas, S. Nuri
Sayers, Chera L. |
| ISBN: | 978-1-4518-5642-2 |
| Publication Date: | Oct 1999 |
| Publisher: | International Monetary Fund
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| Book Format: | Paperback |
| List Price: | AUD $23.95 |
Book Description:
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A reduction in the legal workweek may induce a degree of downward wage flexibility, while an employment subsidy to firms accommodates downward wage rigidity. It may be possible, therefore, to increase employment with a policy that combines a reduction in the workweek with an employment subsidy. In general, however, the long-run employment outcome is ambiguous, and a decline in output cannot be ruled out. More direct policy measures whose impact can be assessed with greater...
More DescriptionA reduction in the legal workweek may induce a degree of downward wage flexibility, while an employment subsidy to firms accommodates downward wage rigidity. It may be possible, therefore, to increase employment with a policy that combines a reduction in the workweek with an employment subsidy. In general, however, the long-run employment outcome is ambiguous, and a decline in output cannot be ruled out. More direct policy measures whose impact can be assessed with greater certainty--in particular, removing structural rigidities in the labor market--should be given priority to decrease long term unemployment.