{
  "title": "Can a Shorter Workweek Induce Higher Employment? Mandatory Reductions in the Workweek and Employment Subsidies",
  "publication": "IMF Working Papers, October 1, 1999",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/30/can-a-shorter-workweek-induce-higher-employment-mandatory-reductions-in-the-workweek-and-3306",
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  "summary": "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.",
  "sections": [
    {
      "heading": "Summary findings",
      "content": "- A reduction in the legal workweek may induce a degree of downward wage flexibility.\n- An employment subsidy to firms accommodates downward wage rigidity.\n- A policy that combines a reduction in the workweek with an employment subsidy may be able to increase employment.\n- In general, the long-run employment outcome is ambiguous.\n- A decline in output cannot be ruled out."
    },
    {
      "heading": "Policy implications and recommendations",
      "content": "- Combining workweek reductions with employment subsidies can, under some conditions, increase employment.\n- More direct policy measures whose impact can be assessed with greater certainty should be given priority to decrease long term unemployment.\n- In particular, removing structural rigidities in the labor market is highlighted as a priority."
    },
    {
      "heading": "Analytical focus and themes",
      "content": "- Employment, Employment subsidies, Income, Labor, National accounts, Wages\n- Key analytical topics: equilibrium wage, income level, job creation, labor demand, labor supply, market wage, minimum wage, overtime work, responses to a cut, structural unemployment, take-home pay, wage determination, wage response, worker income, worker utility, workweek\n\n---\n\n Content in this bundle\n\n- wp99144\n  - wp99144 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - wp99144 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/30/can-a-shorter-workweek-induce-higher-employment-mandatory-reductions-in-the-workweek-and-3306"
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    "Authors: S. Nuri Erbas, Chera L. Sayers",
    "Published: October 1, 1999",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781451856422.001",
    "A reduction in the legal workweek may induce a degree of downward wage flexibility.",
    "An employment subsidy to firms accommodates downward wage rigidity.",
    "A policy that combines a reduction in the workweek with an employment subsidy may be able to increase employment.",
    "In general, the long-run employment outcome is ambiguous.",
    "A decline in output cannot be ruled out.",
    "Combining workweek reductions with employment subsidies can, under some conditions, increase employment.",
    "More direct policy measures whose impact can be assessed with greater certainty should be given priority to decrease long term unemployment.",
    "In particular, removing structural rigidities in the labor market is highlighted as a priority.",
    "Employment, Employment subsidies, Income, Labor, National accounts, Wages",
    "Key analytical topics: equilibrium wage, income level, job creation, labor demand, labor supply, market wage, minimum wage, overtime work, responses to a cut, structural unemployment, take-home pay, wage determination, wage response, worker income, worker utility, workweek",
    "**_wp99144**"
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