Research

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. 

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.