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BPEA Article

Hours Reductions as Work-Sharing

Abstract

OVER THE PAST century, annual hours per worker have been falling in
industrialized countries. This fall could be influenced by labor supply,
through an income effect, as workers have become richer, but it could
also be influenced by labor demand, as the increasingly skill-intensive
nature of jobs has reduced the number of hours for which workers can
maintain high productivity. For most of the period, the motivation
expressed by those campaigning for shorter hours has been to improve
health and safety, or simply to improve the quality of life. When concern
about the level of unemployment has been high, however, the
declared motivation has sometimes been "work-sharing," which is the
hope (or conviction) that a reduction in hours per worker will spread
the available work around and hence increase employment. This motivation
was important during the Great Depression in the United States
and other countries, and it has resurfaced in Europe since unemployment
began to rise around 1975.

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