The Effect of Shop Opening Hours Deregulation

The paper presented in this ZEW Research Seminar estimates the impact of shop opening hours deregulation on the retail sector market structure, and on the size and composition of its labor force. To identify the effect of interest, the authors exploit the staggered implementation of a reform allowing Italian municipalities to adopt fully flexible opening hours in the late 1990s. Their findings indicate that lifting opening hours restrictions increased employment by about 3% and raised the number of shops in the affected municipalities by about 2%. The major effects are concentrated amongst workers in larger plants, which were better able to exploit the flexibility introduced by the new regime. Correspondingly, an investigation of individual-level data suggests that the deregulation produced a rearrangement of the labor force towards employees against self-employed.