Shorter Hours, Lower Output? Evidence from a Century of Working-Time Legislation

Pedro Gomes ()
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Pedro Gomes: Birkbeck, University of London

No 19073, IZA Discussion Papers from IZA Network @ LISER

Abstract: Reducing working hours is widely believed to lower output. I study more than 250 legislated reductions in normal working hours worldwide over the past century. Using local projections and synthetic controls, I find that actual hours fell when reforms applied, but output did not: a decade later, GDP and GDP per capita were about 3 per cent higher than in a plausible counterfactual. Classifying each reform by its motivation and dating the start of its discussion, I find similar results for reforms whose timing was unrelated to economic conditions. Historically, on average, legislated working time reductions have not lowered output.

Keywords: working-time reduction; working hours legislation; economic growth; local projections; synthetic control (search for similar items in EconPapers)
JEL-codes: E23 J22 J81 J88 N30 (search for similar items in EconPapers)
Date: 2026-11
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