Worker productivity, working time reduction, and the short-run and long-run employment effects

This paper illustrates a shirking-type efficiency wage model to explain why shorter working hours cause are ambiguous effect on employment as the empirical result. We find that, shorter working hours have an uncertain impact oil the work effort, and the relationship between work effort and shorter working tune is a decisive factor in tire employment effect of working tinge reduction. Moreover, it is also found that, given the zero profit constraint, the long-run employment effect of reducing working hours will intensify the short-run employment effect.