The Employment Effects of Shorter Working Hours: An Application to Japanese Data.

This paper applies a simple model of hours, employment, and earnings to Japanese manufacturing data and shows that a reduction in the number of standard hours is likely to increase overtime and reduce employment. These findings are in line with recent theoretical developments and in contrast to the predictions of traditional analysis of hours and employment adjustment. This difference is shown to be due to the treatment of the wage rate. Copyright 1989 by The London School of Economics and Political Science.