Long-Term Trends in Leisure and Work Hours

Abstract

This article describes long-term trends in hours worked, both in Japan and other countries, and uses economic theory to suggest explanations for the observed patterns. There are four main findings: (1) In Japan, the reduction in hours worked of regular workers has typically been during periods of labor shortage. (2) The reform of the Labor Standard Law in 1987 contributed to reducing the hours worked by Japanese workers to the same level as that of their American counterparts. Nonetheless, the hours worked by regular workers have been stable since 1993. (3) It is difficult to explain the differences between Japan and continental European countries in per capita hours worked based only on tax wedges. It is necessary to take into consideration the differences in the uses and benefits of taxes, including payroll taxes. (4) The reduction in hours worked in continental European countries is largely due to collective agreements and to governments' regulation of working hours based on the idea of "work-sharing," creating jobs by reducing working hours. In reality, hours worked were reduced but at the detriment of employment.