The Impact of Sunday Shopping Deregulation an Employment and Hours of Work in the Retail Industry: Evidence from Canada

Using aggregate data on employmnet and hours of work from four Canadian provinces at two levels of the retail trade industry, I estimate a simple dynamic labour demand model in order to examine retail firm responses to Sunday shopping deregulation. The estimates suggest that among general merchandise stores deregulation resulted in long run increases in both the employment level and average weekly hours of work. In contrast, among more specialized retail establishments there is only evidence of an increase in average weekly hours. In addition, despite evidence of an immediate shortfall in the total labour input employed by general merchandise stores below the long run optimal level, the results suggest that these firms were unable to compensate by temporarily increasing the hours of their existing employees.