The Effects of reducing working hours on Employment: From Ex-ante Simulations to Ex-post Evaluations

Abstract

The French collective introduction of a shorter working week was put in place with a view to creating substantial numbers of jobs both in 1982, with the reduction of legal working hours from 40 to 39 and the introduction of the fifth week of paid holidays, and in 1998 and 2000 with the reduction of the legal working week to 35 hours. The greatest difference between the ex-ante analyses and ex-post evaluations made by DARES in the recent period concerns the actual reduction in the working week, which was ultimately smaller than had been calculated in the ex-ante simulation exercises. The estimates show that by seeking a balance between shorter working week, wage moderation, productivity gains and State aid, the shorter working week process generated a swift upturn of nearly 350,000 jobs from 1998 to 2002, apparently without any major financial imbalance for the companies.Working Hours, Employment, Model Evaluation