Can a Shorter Workweek Induce Higher Employment? Mandatory Reductions in the Workweek and Employment Subsidies |
|
| Author:
| Erbas, S. Nuri
Sayers, Chera L. |
| Series title: | IMF Working Papers |
| ISBN: | 978-1-4527-2095-1 |
| Publication Date: | Oct 1999 |
| Publisher: | International Monetary Fund
|
| Book Format: | Ebook |
| List Price: | Contact Supplier contact
|
Book Description:
|
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.