Working Hours and Productivity in Swedish Manufacturing

The magnitude of the elasticity of output with regard to working hours is an important factor in the debate on working time. Despite some attempts at its estimation, little is known about this elasticity and empirical studies have yielded contradictory results. The main objective of this study is to analyze the sensitivity of the magnitude of the elasticity of output with respect to working hours to different production function specifications. Our best estimate of the elasticity of output with respect to working hours in Swedish manufacturing is thus 0.91, but we cannot reject the hypothesis that this elasticity is equal to one. This suggests that a reduction in working hours would not have any significant productivity effects