The Limitations of Overtime Limits to Reduce Long Working Hours: Evidence from the 2018-2021 Working Time Reform in Korea

This allows reweighting the control group such that the distributions of the covariates are comparable with those of the treatment group before the reform.13 We use this technique to balance the means of the four variables with the largest pre-reform differences: gender, education, rural vs urban status, and relation to household head. [...] The incidence of working different sets of hours (1-39, 40, 41-52 or more than 52 hours) followed comparable trends for the treatment and control groups before the implementation of the reform.14 Average hours worked as a continuous variable also followed comparable trends for the treatment and control groups before the implementation of the reform (Figure A1 in the Appendix). [...] We do not have a good explanation for the reduction in the incidence of working time 41- 52 and the increase in that working exactly 40 hours at the time of the reform in the control group (as well as other firm size groups). [...] The modest incidence of minimum wage workers among firms with more than 100 employees and its strong concentration among part-time workers further suggest that the increase in the minimum wage in January 2018 is unlikely to explain the reduction in the incidence of working between 41-52 hours and the increase in the incidence of working exactly 40 hours. [...] This dynamic regression consists of a set of dummy variables for each quarter of the pre- and post-period, which capture the effect of the difference between the treatment and control groups conditional on controls relative to the quarter just before the reform was implemented (the quarter for which the quarter dummy is omitted).