France's shorter workweek hit lower-skilled workers harder
Doing more with less has become standard operating procedure for many in the current economic climate. And for some in the wake of France's 1998 workweek reduction, it was in response to a reform that's still being debated today.
France's 1998 workweek reduction, initiated by socialist Prime Minister Lionel Jospin, shortened the statutory workweek from 39 to 35 hours without reducing pay. Employers could claim payroll tax cuts of up to 11% for adopting the reduced hours. The policy was phased in by firm size, with larger firms implementing it by January 2000 and smaller firms by January 2002.
Analysis by a research team led by Elio Nimier-David, assistant professor of economics at the ILR School, found that while employment remained unchanged generally, there were significant effects on different worker groups. Employment among managers and professionals increased due to work sharing, while lower-skilled workers experienced a significant decrease in employment.
The team, including Pauline Carry, Claire Montialoux, Alexandra Roulet, and Nina Roussille, analyzed the reform's impact over nearly five years using administrative and survey data. They found that the reform led to a 6% reduction in total hours worked in the economy, but only a modest 1% decline in production. This was offset by productivity gains, which rose by 2%.
The researchers attribute the mixed outcomes to reorganization and work intensification among lower-skilled workers. They note that workers were forced to either accept reduced hours or move to part-time positions, leading to a broader shift toward shorter hours. The overall analysis suggests that the reform created a 3.8% reduction in employment, which was largely offset by payroll tax cuts.
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