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CEP Discussion Paper
Sinking the Blues: the Impact of Shop Closing Hours on Labor and Product Markets
Maarten Goos
December 2004
Paper No' CEPDP0664:
Full Paper (pdf)

JEL Classification: J23; L11; L81

Tags: shop opening hours; labor demand; organization of retail markets

There is a growing consensus among economists that extending shop opening hours creates jobs. While this is probably true in deregulating industries, this paper argues there are some deficiencies in the existing hypotheses about how exactly deregulation affects employment. First, this paper exploits recent changes in Sunday Closing Laws in the US to find that total employment, total revenue and the number of shops increase in deregulating industries and possibly decrease in non-deregulating industries. Second, a model assuming consumers like shopping on Sunday, monopolistic competition and low barriers to entry is presented to show how consumer behavior and retail competition can explain the observed impact of deregulation on retail labor and product markets and therefore ultimately employment.