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Research
on the Effects of Shorter Working Hours on Employment
(January 17, 2001)
Work-sharing Research Committee |
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| This
research attempted to estimate the effects of shorter working
hours on employment based on a measurement model in order
to explore the conditions required to maintain and expand
employment by shortening working hours. Using the labor demand
function and consumption function, empirical analyses were
conducted to study how to change labor demand for each employment
style through salaries, and furthermore to clarify the effects
of shorter working hours on consumption expenditure through
an analysis of the changes in the income of workers. The analyses
were conducted from the following three perspectives. |
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| 1. |
Examination of
the effects of salaries on employment [Maintenance and reduction
of salary, increased salary of part-time workers] |
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| 2. |
Examination of
the types of employment that are affected [Regular workers
and part-time workers] |
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| 3. |
Examination of
the effects of shorter working hours on consumption expenditure
[Consumption effect] |
| Overview of simulation
findings |
|
A simulation was
conducted of the employment effect and consumption effect
when the working hours of regular workers are shortened by 5%.
Four cases with different salaries were analyzed. The findings
are described below.
Working hours were shortened by 5% for the simulation based
on the estimation that a worker’s total annual working
hours would be about 1800 hours when working hours are shortened.
This would equal a monthly average of approximately 8 hours,
or one day of work. Because the work-sharing
scheme mainly targets regular workers, the analyses also took
into account alternative demands for part-time workers.
In all four cases, shorter working hours had a considerably
positive effect on employment. In the cases where salary was
reduced (cases 1 and 3), the number of regular workers increased.
In the cases where salary was maintained (cases 2 and 4), the
number of regular workers decreased, but the number of part-time
workers increased at a higher proportion than cases 1 and
3. Furthermore, when the salary of part-time workers was raised,
there was less substitution of regular workers with part-time workers. |
| The working
hours of regular workers were shortened 5%, and the
following conditions were applied. |
| Case
1: |
Reduction
of salary in proportion to shortened working hours (time-wage
rate was kept the same) |
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—>
Increased employment for 2,150,000 people |
| Case 2:
|
Original
salary was maintained (time-wage rate was increased
5%) |
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—>
Increased
employment for 2,850,000 people |
| Case 3:
|
Case 1 +
salary of part-time workers (time-wage rate) was increased
1% |
| |
—>
Increased
employment for 1,500,000 people |
| Case 4:
|
Case 2 +
salary of part-time workers (time-wage rate) was increased
1% |
| |
—>
Increased
employment for 2,080,000 people |
| *
With respect to the effects on consumption expenditure,
the figures were not substantial, but an overall positive
effect was observed. |
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