Keywords
Formal employment
Work-sharing
Metrica
How to Cite
Abstract
This article investigates the impact of the reduction in statutory working hours on formal job creation in Brazil, focusing on the change in the weekly limit from 48 to 44 hours introduced by the 1988 Constitution. Using a difference-in-differences strategy with continuous treatment applied to PNAD
microdata from 1981 to 1990, the analysis exploits sectoral and regional heterogeneity in exposure to the regulatory shock, measured by the share of hours worked in long workweeks prior to the legal change. The results suggest that each 10 percentage point increase in prior exposure to workweeks
between 45 and 60 hours is associated with a 1.2% to 1.3% increase in sectoral employment following the consolidation of the new working-hours standard. Dynamic analyses and placebo tests support the validity of the empirical strategy. Overall, the findings are consistent with the existence of an effective
work-sharing mechanism in Brazil associated with the 1988 Federal Constitution.
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