RIETI Report November 12 2021

Teams become more productive when their hours are shorter

Dear Readers,
Welcome to RIETI Report.
This bi-weekly newsletter will keep you updated with the recent columns, event information and research results by RIETI fellows and other leading economists in Japan and around the world.
In this edition, we address issues related to the relationships between productivity and working hours.
We hope you will enjoy it. If you have any feedback, we would love to hear from you.
Editors of RIETI Report (Facebook: @en.RIETI / Twitter: @RIETIenglish / URL: https://www.rieti.go.jp/en/)

This month's featured article

Teams become more productive when their hours are shorter

Ruo SHANGGUANWaseda University

Jed DEVAROCalifornia State University East Bay

OWAN HideoFaculty Fellow, RIETI

Is it true that less really is more? Can companies, by asking less of their workers, actually get more out of them? The answer, at least in some cases, is yes. A historical example comes from Britain during WWI. Workers, most of them women paid on piece rates and working long weekly hours, were engaged with the task of manufacturing artillery shells for the British military. Although investing more hours allowed these women to increase their production, that was true only up to a point. When the workweek was already quite long, assigning additional hours reduced productivity, perhaps due to workers' fatigue and exhaustion. In short, the relationship between a worker's productivity and her working hours exhibited an inverted U shape.

This intriguing phenomenon from a century ago – discovered by Pencavel (2015) – raises important questions for today. Does this pattern of work hours and productivity exist in the modern workplace? Can it be found outside of the simple, individualistic production process of military manufacturing? Is it observed in the more complex, team-oriented production settings that increasingly describe the modern workplace? If so, does the way in which working hours are allocated across a team's members matter for productivity and, if so, how? Does productivity actually increase if companies impose shorter work schedules to cut back on labour during a recession?

To read the full text
https://www.rieti.go.jp/en/columns/v01_0167.html

Related articles on RIETI's website

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by MORIKAWA Masayuki (President, RIETI)
https://www.rieti.go.jp/en/columns/v01_0155.html

"A New Working Style in a Post-COVID-19 Era—Will Working from Home Spread in Japan?"
by KURODA Sachiko (Faculty Fellow) / OWAN Hideo (Faculty Fellow)
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"Appropriate Use of Teleworking is the Key—The COVID-19 Crisis and Productivity"
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Our latest discussion papers

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by ARAI Kosuke (Keio University) / FUJIWARA Ippei (Faculty Fellow, RIETI) / SHIROTA Toyoichiro (Hokkaido University)
https://www.rieti.go.jp/en/publications/summary/21110011.html

"We Are Alike: Capital Structure of Japanese SMEs Across Prefectures"
by Huseyin OZTURK (Central Bank of the Republic of Turkey) / YASUDA Yukihiro (Hitotsubashi University)
https://www.rieti.go.jp/en/publications/summary/21110010.html

"Population Aging and Small Business Exits"
by XU Peng (Hosei University)
https://www.rieti.go.jp/en/publications/summary/21110007.html

"Are SMEs Avoiding Compliance Costs? Evidence from VAT Reforms in Japan"
by SUZUKI Takafumi (Aichi Shukutoku University) / KAWAKUBO Takafumi (London School of Economics)
https://www.rieti.go.jp/en/publications/summary/21110003.html

"Does Trade Credit Absorb Adverse Shocks?"
by TSURUTA Daisuke (Nihon University) / UCHIDA Hirofumi(Kobe University)
https://www.rieti.go.jp/en/publications/summary/21110002.html

[List of discussion papers]
https://www.rieti.go.jp/en/publications/act_dp.html

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