It has been hypothesized that a reduction in the average length of the workweek in a country will reduce the unemployment rate. The theory is that of job-sharing—if everybody works 5% less, the unemployed workers can pick up the reduced hours. Table 2.1 gives the percentage decrease in annual working hours per employee from 1975 to 1994 as well as the increase in unemployment rate for nine countries. Do these data support the hypothesis that job-sharing reduces unemployment?

Table 2.1

Data on Workweeks and Unemployment % Decrease in Annual Working Hours per Employee Country U.S. Italy Japan Canada Britain Spain Holland Germany France 3.0% 5.3 7.0 6.6 9.4 10.8 12.5 12.5 12.8 % Increase in Unemployment -2.0% 5.0 0.0 5.0 5.0 15.0 0.5 3.0 9.0