Firm-Level Effects of Reductions in Working Hours (with Alessandro Tondini and Marta C. Lopes)
Abstract: This paper examines how legislative reductions in working hours impact firms' employment, output, and productivity. We exploit a Portuguese reform that reduced standard hours from 44 to 40 hours in 1996. Our findings indicate that the reform had adverse effects on the employment and output of affected firms. These effects can be attributed to an increase in hourly labor costs induced by the legal obligation not to reduce monthly salaries. Treated firms adjusted their employment by reducing hiring and significantly improved hourly labor productivity. In contrast, firms that reduced working hours through collective agreements prior to the reform were able to increase productivity without adverse effects on employment and output. A key policy takeaway of these combined findings is that estimating effects on early-adopters is likely to give a biased estimate of the overall cost of the switch to lower hours.
Consequence of Hometown Regiment - What Happened in Hometown When the Soldiers Never Returned? (with Ryo Kambayashi)
Abstract: Sometimes, war results in a large gender imbalance in certain cohorts and areas that changes the path of economic development. However, there is ambiguity around this notion because the market economy has a strong restoring force. This study contributes to the existing literature by presenting the Japanese experience during the Second World War. Japan lost approximately 2 million soldiers during 1938-1945. Furthermore, the loss of young males concentrated in certain cohorts of certain geographical areas owing to hometown regiment system. By exploiting the variation of changes in gender balance cohort-by-prefecture, we examined the effect of the loss of young males on the post-war industrial structure. We observed that the reduction in the gender ratio may have led to slower industrialization, although to a limited extent quantitatively.
Reputation in International Trade: Evidence from the Fukushima Nuclear Disaster (With Christian Abele)
Abstract: A country’s reputation may be an important determinant of its ability to export but the effect is difficult to isolate from underlying product attributes. We consider the trade impact of the Fukushima nuclear disaster and ask whether damage to the Japanese reputation for food safety played a role in its impact. The disaster led to a large and prolonged reduction in Japanese food export value to the EU by up to 40% immediately following the disaster compared to products from other East Asian countries, with many products ceasing to be exported for up to four years. Since radiation exposure, capacity destruction and trade restrictions varied by product and prefecture, we use agricultural production data to identify products unlikely to be affected by these negative supply shocks. Such products still exhibit a sizeable reduction in exports, suggesting that a change in the perceived riskiness of Japanese products in the eyes of foreign consumers could have shaped the trade reaction.
Do Cognitive Skills Explain the Rise of Income Inequality in OECD Countries? (with Thomas Breda and Marco Paccagnella)
Abstract: Using microdata from the two OECD skill surveys, this paper investigates the role of cognitive skills in explaining the growth of wage inequalities. The findings indicate that basic cognitive skills have contributed to increased wage inequality. The primary contribution comes from changes in the returns to cognitive skills rather than from variations in the distribution of these skills. Additional evidence suggests that the previously attributed role of education in driving wage inequality partly stems from the impact of cognitive skills. These findings align with the perspective that recent technological advancements have increased the demand for cognitive skills.
Work-in-Progress:
Gender Differences in the Effects of Reducing Working Hours
Contributions:
DINA Income Inequality Series (Japan) - World Inequality Database