Wages and the Length of the Working Day. An Empirical Test Based on Norwegian Quarterly Manufacturing Data.

A simple framework is specified which is suitable for testing the relationship between the length of the working day and wages per hour. The relationship is tested on Norwegian manufacturing data, using both dynamic modeling and cointegration techniques. Both methods provide empirical support for a hypothesis of long-run independence of real wages and hours, conditional on constant productivity and unemployment. The results from dynamic modeling confirm that there are significant short-run effects of changes in normal hours, corresponding to the income-compensation schemes usually introduced along with reduction in the length of the working day. Copyright 1989 by The editors of the Scandinavian Journal of Economics.