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The Effects of the Legal Minimum Working Time on Workers, Firms and the Labor Market

Author

Listed:
  • Pauline Carry

    (CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - X - École polytechnique - IP Paris - Institut Polytechnique de Paris - ENSAE Paris - École Nationale de la Statistique et de l'Administration Économique - CNRS - Centre National de la Recherche Scientifique, ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique)

Abstract
This paper provides new evidence on how firms and workers adjust to a restriction on lowhour jobs. I exploit a unique reform introducing a minimum workweek of 24 hours in France in 2014, affecting 15% of jobs. Drawing on linked employer-employee data and an event study design, I find a firm-level reduction in the number of jobs and an increase in average hours per worker. Overall, total hours worked in the firm decreased significantly, showing imperfect substitutability between workers and hours. The effects differ by gender: part-time female workers were replaced by full-time male workers. Importantly, reduced-form evidence indicates the reallocation of workers from firms highly exposed to the policy to firms less exposed. To quantify the aggregate impact taking into account these effects, I build and estimate a search and matching model with heterogeneous workers and firms. I find that the minimum workweek destroyed 1% of jobs but had no effect on total hours, due to positive general equilibrium effects. Finally, the gender gap in welfare increased by 3% because women were more affected by the direct negative employment effects and benefited less from reallocation effects.

Suggested Citation

  • Pauline Carry, 2022. "The Effects of the Legal Minimum Working Time on Workers, Firms and the Labor Market," SciencePo Working papers Main hal-04067393, HAL.
    • Handle: RePEc:hal:spmain:hal-04067393
    Note: View the original document on HAL open archive server: https://sciencespo.hal.science/hal-04067393
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    File URL: https://sciencespo.hal.science/hal-04067393/document
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    References listed on IDEAS

    as
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    1. Marta Lachowska & Alexandre Mas & Raffaele Saggio & Stephen A. Woodbury, 2023. "Work Hours Mismatch," NBER Working Papers 31205, National Bureau of Economic Research, Inc.

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    Keywords

    Working time regulation; Hours of work; Reallocation effects; Gender inequality;
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