Godechot Olivier, 2016, « Can We Use Alsace-Moselle for Estimating the Employment Effects of the 35-Hour Workweek Regulation in France? », Mimeo.
Comment on Matthieu Chemin and Etienne Wasmer, “Using Alsace-Moselle Local Laws to Build a Difference-in-Differences Estimation Strategy of the Employment Effects of the 35-Hour Workweek Regulation in France”, Journal of Labor Economics, 2009, vol. 27, n°4, p. 487-524.
Chemin and Wasmer’s article (2009) finds that the 35-hour workweek did not create jobs. It exploits a natural experiment: three French departments (“Alsace-Moselle”) enforced a reduction in working time of smaller magnitude because in this region firms could integrate two additional public holidays in their calculation, which exist for historical reasons. The 2009 article shows first that employees of this region endured indeed a smaller reduction in working time and second that this smaller reduction in working time was not followed by more unemployment or less job creation. While replicating this article, I discovered a coding error in the definition of firms’ size that seriously undermines the results. Moreover, the article did not take into account that an important fraction of workers in the region were cross-border workers who were not directly subject to the reduction of working time. Correcting for the error in firm definition and excluding the cross-border workers from the sample calls into question the main hypothesis of the article. Reduction in working time, as measured with the French Labor Force Survey, was of similar magnitude in Alsace-Moselle as in the rest of France. Hence my replication cast doubts on the validity of this natural experiment for properly evaluating the impact of the reduction in working time policy on employment.
Article submitted to the Journal of Labor Economics. Available on request.
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