Work sharing, employment and wages

Lars Calmfors

European Economic Review, 1985, vol. 27, issue 3, 293-309

Abstract: The paper analyzes the effects of a reduction in working time on wages and employment with a monopoly union. In general it is not clear in which directions these variables move, but if employment and working time are perfect substitutes, the effects are related to how working time has been determined initially: the wage increases if initial working time is smaller than or equal to the trade union optimum, whereas the result is unclear when it is larger. In this case it is never optimal for a trade union to reduce both the wage and working time in response to a recessionary supply shock. The analysis may help to explain varying attitudes towards work sharing in different countries.

Date: 1985
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eecrev:v:27:y:1985:i:3:p:293-309

DOI: 10.1016/S0014-2921(85)80017-9

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