RIETI Report January 2016

Working hours decrease due to technological progress and increase due to urban agglomeration

Overworking has become a social problem, and research has shown that working hours are longer in less developed countries as well as longer in more urbanized regions. This can be explained by two key factors: production technology and urban agglomeration. In the January issue of the RIETI Report, we present the column "Working hours decrease due to technological progress and increase due to urban agglomeration" by Senshu University Professor Takanori Ago, Kindai University Associate Professor Tadashi Morita, Faculty Fellow Takatoshi Tabuchi, and Osaka University Associate Professor Kazuhiro Yamamoto, and which was originally published on our partner site, VoxEU.org.

Ago et al first look at why people work shorter hours in developed countries than in developing countries. They then address why people work longer in cities than in rural regions. This apparent contradiction is explained by the production technology level, while the interregional difference can be explained by the population density. Working hours are long in developing countries with low technology level as well as in urban regions with agglomeration of firms.

**RIETI is pleased to announce the first posting of an article by IZA, with whom we recently entered into a partnership to distribute timely and incisive research on labor market issues.**


This month's featured article

Working hours decrease due to technological progress and increase due to urban agglomeration

AGO TakanoriProfessor, School of Commerce, Senshu University

MORITA TadashiAssociate Professor, Kindai University

TABUCHI TakatoshiFaculty Fellow, RIETI

YAMAMOTO KazuhiroAssociate Professor, Graduate School of Economics, Osaka University

Working hours increased during the Industrial Revolution and decreased afterward (Voth 2003). Although working hours decreased after World War II all over the world, overworking has become a social problem in the US, among others (Kuhn and Lozano 2008).

There are two stylised facts on geographical differences in working hours across countries and regions.

  • First, working hours are longer in less developed countries.
  • Second, working hours are longer in more urbanised regions than rural regions.

If urbanised regions such as big cities are regarded as developed countries, these two facts look contradictory. We show in this column that this is not a contradiction. We present two key factors—production technology and urban agglomeration—which explain the mechanisms behind the geographical differences in working hours.

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