Labour Economics

06008335

‘Using Alsace-Moselle Local Laws to Build a Difference-in-Differences Estimation Strategy of the Employment Effects of the 35-Hour Workweek Regulation in France’

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Provide a sketch of a framework analysis which could explain the facts reported and discuss the methodology used and the evidence that supports the argument.

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The reduction in working time (RWT) which reduced working time hours from 39 to 35 hours per week, began in France in 1998. This caused regulatory shocks on the labour market and sparked many economic discussions and studies. Chemin & Wasmer look to evolve many previous studies done on the impact of the RWT by building on their criticisms. As they mention ‘The goal of this paper is to provide a methodology that overcomes the identification problem by making use of a relatively unknown French specificity.’ The unknown specificity in question is the history and inheritance of regions in France called Alsace-Moselle. The phenomenon that came to light after the reform, was work supplied by firms in these regions decreased less than in the rest of France, making the reform less favourable in Alsace-Moselle. Their paper is a in depth comparative study of life in Alsace-Moselle with the rest of France before and after the implementation of a 35-hour work week.

Chapter 1 provides a brief outline of the laws which were brought about this RWT as well as the basis of the identification strategy proposed by Chemin & Wasmer. The laws which enforced the changes in working time came to be known as Aubry I and Aubry II. The first encouraged firms with over 20 employees to reduced working time when introduced on 13th June 1998, while the second made it compulsory on 19th...