'The Long Run and Real Effects of the Working Hours Restriction: Evidence From France'

This paper uses a theoretical and empirical approach to examine the long run effects of working hours restrictions on the natural rate of unemployment. We estimate a French NAIRU using the Kalman filter applied to a Phillips curve model with French quarterly data between 1987 and 2009. The resulting profile of the NAIRU is then analysed around the introduction of these restrictions and suggests a fall in the NAIRU greater than that reflected in the actual unemployment series alone. The Bai-Perron multiple break point test, adds further evidence of real effects from this policy by predicting regime change around the announcement and implementation of this policy.