The impact on employment of a reduction in the length of the working week

Abstract

Since the mid 1970s there has been a growing international debate about whether 'work sharing' or reductions in the average length of the working week can provide both a long-term and a short-term solution to the problem of unemployment that has plagued all developed countries. Various international reports have been published together with numerous studies for individual countries (see for example Commission of the European Communities (CEC), 1980; Allen, 1980; Ginneken, 1984; and OECD, 1984). Since the war the working week in the UK has shrunk at a fairly steady rate of about 1% per annum (see Wilson, 1982), much in line with results reported by Maddison (1979) for a number of European countries. Since 1974/75 the long-term tendency to reduce the agreed level of weekly hours has weakened slightly. However, the sharp increase in short-time working has offset this to a considerable extent, and more recently the downward trend in negotiated weekly hours has accelerated. The long-term reduction in the agreed level of basic or normal weekly hours has been partly offset by a continuous rise in the volume of overtime working (measured by the proportion of people working overtime and the average number of overtime hours worked: see Wilson, 1982, for details). These changes have also been accompanied by changes in the pattern of work, notably the trends towards part-time working and shift working. Thus, although there has not been a one-to-one relationship between average weekly hours (henceforth average hours) and basic or normal weekly hours (henceforth normal hours), a fall in normal hours has usually been followed by a fall in average hours. From this experience it would seem that any policy aimed at reducing the length of the average working week would need to operate through the collectively agreed normal or basic weekly hours. As noted below, however, the theoretical case for such a policy is not entirely clear cut. Furthermore, given the limited number of statutory instruments relating to normal hours, the most likely policy levers for affecting hours in the UK would probably involve some form of wage subsidy aimed at encouraging a substitution of people employed for hours worked. The study by Allen (1980) summarising the debate in the UK up to that time argues that there is not a simple one-to-one relationship between normal and average hours. He