A reduction in the legal workweek may induce a degree of downward wage flexibility, while an employment subsidy to firms accommodates downward wage rigidity. It may be possible, therefore, to increase employment with a policy that combines a reduction in the workweek with an employment subsidy. In general, however, the long-run employment outcome is ambiguous, and a decline in output cannot be ruled out. More direct policy measures whose impact can be assessed with greater certainty—in particular, removing structural rigidities in the labor market—should be given priority to decrease long term unemployment.

A reduction in the legal workweek may induce a degree of downward wage flexibility, while an employment subsidy to firms accommodates downward wage rigidity. It may be possible, therefore, to increase employment with a policy that combines a reduction in the workweek with an employment subsidy. In general, however, the long-run employment outcome is ambiguous, and a decline in output cannot be ruled out. More direct policy measures whose impact can be assessed with greater certainty in particular, removing structural rigidities in the labor market should be given priority to decrease long term unemployment.

Would replacing the conventional work week with a four-day option benefit economic performance and well-being? In the framework of economics, the question is whether work week reform can make some individuals better off without making other individuals worse off in ways that do not hamper other goals such as efficiency, economic growth, and equity. Social and individual welfare outcomes would depend on whether reforming the work week involves shortening the length of the work day versus rearranging the timing of work. The “public good” case for a policy that induces shorter hours of work per employee is a logical extension from evidence of the adverse effects stemming from excessively long hours of work on workers' stress, work/life balance and productivity per hour. A shorter work week may improve workers' well-being if it creates more total employment opportunities; allows more free time to be used at employees' discretion and control over work time; is accompanied by partial income replacement under states' “work-sharing” programs; and is well targeted toward workers who prefer shorter hours than they are currently working. Given the heterogeneity of work hour preferences by stage of life-cycle, the most promising Fair Labor Standards Act reform proposals, from an individualistic standpoint, would be those ensuring that employers consider individual employee requests for flexibility in the number of hours over or the times when the employee is required to work.

Describes, in particular, the experience resulting from the successful 1989-1991 campaign for a shorter working week by the Confederation of Shipbuilding and Engineering Unions.