Hours vs employment in response to demand shocks : evaluating the labor market effects of temporary aggregate demand shocks requires analyzing both employment and hours of work

Robert A. Hart

Labor market responses to temporary aggregate demand shocks are commonly analyzed and discussed in terms of changes in employment and unemployment. However, it can be seriously misleading to ignore the interrelated behavior of hours worked.Work hours can be altered relatively speedily and flexibly, and this strongly relates to employment, labor productivity, and unemployment outcomes. The hours–employment distinction is especially important in the evaluation of the performances of European labor marketsduring the negative shock experienced during the Great Recession.

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Year of publication:	October 2017
Authors:	Hart, Robert A.
Publisher:	Bonn : Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA)
Subject:	demand shocks \| hours \| employment \| labor productivity \| Arbeitszeit \| Working time \| Schock \| Shock \| Gesamtwirtschaftliche Nachfrage \| Aggregate demand \| Arbeitsproduktivität \| Labour productivity \| Arbeitsnachfrage \| Labor demand \| Beschäftigungseffekt \| Employment effect \| Schätzung \| Estimation \| Erwerbstätigkeit \| Employment \| Theorie \| Theory \| Arbeitsmarkt \| Labour market \| Wirkungsanalyse \| Impact assessment