Employment and Hours of Work

Noritaka Kudoh and Masaru Sasaki ()

No 07-35, Discussion Papers in Economics and Business from Osaka University, Graduate School of Economics

Abstract: This paper develops a dynamic model of the labor market in which the degree of substitution between employment and hours of work is determined as part of a search equilibrium. Each firm chooses the demand for working hours and the number of vacancies, and the hourly wage rate is determined by Nash bargaining. A firm increases the demand for hours as recruitment becomes more costly. Labor market tightness influences the composition of labor demand through its impact on the wage rate. Restricting working hours can expand employment, but doing so is not necessarily efficient. When there are two industries that differ in their equipment costs, workers employed by firms with higher equipment costs work longer and earn more.

Keywords: employment; hours of work; search frictions. (search for similar items in EconPapers)
JEL-codes: J21 J23 J31 J64 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2007-10
New Economics Papers: this item is included in nep-bec, nep-dge and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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http://www2.econ.osaka-u.ac.jp/library/global/dp/0735.pdf (application/pdf)

Related works:
Journal Article: Employment and hours of work (2011)
Working Paper: Employment and hours of work (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:osk:wpaper:0735

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