Burda and Weil
Blue Laws∗ Michael Burda Humboldt Universität zu Berlin and CEPR Philippe Weil ECARES, ULB, CEPR and NBER October Abstract This paper investigates the economics of ”blue laws” or restrictions on shop-opening hours, usually imposed on Sunday trading. In the presence of communal leisure or ”ruinous competition” externalities, retail regu- lations can have real effects in a simple general equilibrium model. We look for these effects in a panel of US states and in individual CPS data in the period -. We find that blue laws ) significantly reduce em- ployment both inside and outside the retail sector, ) have little effect on relative annual compensation and labor productivity and ) do not signif- icantly affect retail prices. Employment reduction appears to come at the cost of part-time employment. Keywords: Blue laws, shop opening regulations, retail trade, employment. JEL Classification:D, J, L. ∗ Seminar participants at Berkeley, Irvine, Stockholm (IIES), FU Berlin, Frankfurt/Oder, CERGE (Prague), INSEAD, Rostock, Tilburg, WZ Berlin, Cologne, Göttingen, Dortmund, Rauis- chholzhausen, Freiburg, EUI Florence, Zurich, Mannheim, Bonn, Dresden, Aarhus, the Stock- holm School of Economics, Koblenz, Hannover, and Frankfurt were the source of invaluable comments. We are especially indebted to Katrin Kuhlmann for compiling the US blue law dataset used in the empirical analysis, to Marco del Negro for data, and Silke Anger, Katja Hanewald, Antje Mertens, Stefan Profit, Katrin Rusch and Nicole Walter for research assistance. Thanks are also due the Haas School of Business, UC Berkeley and to CES Munich for hosting the authors at various stages of the project. Introduction Most cultural and religious traditions have holidays and weekly days of rest to allow for leisure, family activities, or scholarly contemplation.
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