I estimate the causal effect of working hour reduction on the workers’
lifestyle and working conditions. I exploit a natural experiment arising from the
transition to the 40-hour workweek system in Korea. The 40-hour workweek
system had gradually been adopted over the years at different times by
establishment size. Using difference in difference instrumental variable
(DD-IV) estimation method and Korean Working Conditions Survey(KWCS)
data, I find that a reduction in working hours significantly improves the
workers’ work-life balance and satisfaction with working condition, while it
worsens rest-autonomy. I also find that smoking, drinking and working speed
are not significantly affected.