If elasticity of employment in respect to working hours is positive then work time reduction decreases employment and the opposite is true if elasticity is negative? I mean if I want to see how employment increases or decreases by reducing working time and spot an elasticity of a positive number that means that the working time reduction, reduced employment? And equally if the elasticity is negative number the working time reduction increased employment?

  • $\begingroup$ Yes this interpretation seems to be fine. You will find detailed discussion of this point in textbooks like Cahuc and Zylberberg. $\endgroup$ – Bertrand Mar 1 '19 at 16:22

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