The French Experience

Chart by G. Trumbull (2001)
The govt of France wanted to reduce unemployment. They reduced the standard legal workweek from 39 hours to 35 hours. The change occurred on January 1, 2000. The new law provided significant disincentives for overtime work. Working under the old 39-hour standard, 8 workers would account for 312 hours of work per week. Under the new 35-hour standard, the same amount of work would require about 9 workers. Was the 35-hour week successful?

Intense political controversy makes it difficult to judge the economic effects of the reduction of the standard work week. People differ in opinions. Opponents of the shorter week argued that an energetic person has a right to work more to make more money. Proponents of the shorter week argued that allowing an employee and an employer to agree to a longer week creates a serious unemployment problem for the general society, what economists call a “negative externality”.

The results are mixed. In the early years, employment increased. In 2007, unemployment returned. Also, they changed the law again. In 2008, the Sarkozy govt passed a new law requiring 25% extra pay for the first 8 hours of overtime, except that a collective bargaining agreement could set a lower rate, but not less than 10%. Estevão and Sá (2008) say it wasn’t successful, because the disadvantages offset the advantages. According to Jeremy Rifkin (2005), it would have been more successful if the law had provided better incentives for working less than 35 hours per week. Michon (2009), Husson (2002), Roger et al (2004) say it was successful, and employment increased due to the reduction of working hours.

References (Internet sources retrieved August 29, 2010, except as noted):

Paul Boffartigue et Jacques Bouteiller, A propos des normes du temps de travail (Institut de Recherches Economiques et Sociales,  http://www.ires-fr.org/IMG/File/R425.pdf).

Marcello Estevão and Filipa Sá, The 35-hour workweek in
France: Straightjacket or welfare improvement? (Economic Policy, 2008,  http://onlinelibrary.wiley.com/doi/10.1111/j.1468-0327.2008.00204.x/pdf).

Jeanne Fagnani and Marie-Therese Letablier, Work and Family Life Balance: The Impact of the 35-Hour laws in France (Work Employment and Society, September 2004, http://wes.sagepub.com/content/18/3/551.abstract).

Michel Husson, Réduction du temps de travail et emploi : une nouvelle evaluation (Institut de Recherches Economiques et Sociales, 2002).

Francois Michon, From Working Less for More Jobs to Working More for More Money (The Japan Institute for Labour Policy and Training, Working Time, 2009, http://www.jil.go.jp/english/reports/documents/jilpt-reports/no.7.pdf#page=8 ). 

Jeremy Rifkin, The End of Work (Spiegel, 2005, http://www.foet.org/press/interviews/Spiegel-%20August%203%202005.pdf).

Muriel Roger, Catherine Bloch-London, Philippe Ashkenazy, La réduction du temps de travail 1997-2003 : dynamique de construction des lois « Aubry » et premières evaluations, (Economie et Statistique, 2004, http://www.persee.fr/web/revues/home/prescript/article/estat_0336-1454_2004_num_376_1_7587#).
Gunnar Trumbull, chart relating employment to 35-hour work week in France (Brookings Institution, 2001, http://www.brookings.edu/fp/cusf/analysis/images/trumbull.gif).

Wikipedia (http://fr.wikipedia.org/wiki/35_heures,

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