Sinking the Blues: the Impact of Shop Closing Hours on Labor and Product Markets

Maarten Goos

CEP Discussion Papers from Centre for Economic Performance, LSE

Abstract: There is a growing consensus among economists that extending shop opening hours createsjobs. While this is probably true in deregulating industries, this paper argues there are somedeficiencies in the existing hypotheses about how exactly deregulation affects employment.First, this paper exploits recent changes in Sunday Closing Laws in the US to find that totalemployment, total revenue and the number of shops increase in deregulating industries andpossibly decrease in non-deregulating industries. Second, a model assuming consumers likeshopping on Sunday, monopolistic competition and low barriers to entry is presented to showhow consumer behavior and retail competition can explain the observed impact ofderegulation on retail labor and product markets and therefore ultimately employment.

Keywords: Shop opening hours; labor demand; organization of retail markets (search for similar items in EconPapers)
JEL-codes: J23 L11 L81 (search for similar items in EconPapers)
Date: 2004-12
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Persistent link: http://EconPapers.repec.org/RePEc:cep:cepdps:dp0664

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