Does decreasing working time reduce environmental pressures? New evidence based on dynamic panel approach

There is a growing interest in the correlation between working time and environmental pressures, but prior empirical studies were mostly focused on static methods within limited country groups. To fill the gap, this study aims to stimulate the discussion by distinguishing between different time periods for developed and developing country groups respectively. In particular, we contribute to a further understanding of the environmental effects of working time reduction policies by comparing the differences under the dynamic framework of system Generalized Method of Moments. We applied this dynamic panel regression approach for 55 countries worldwide over the period 1980-2010, and employing carbon emissions per capita as the environmental indicator. In general, results confirmed the significant relationship between hours of work and environmental impacts in developed economies, although this is not the case for the developing counterparts. Interestingly, the significant correlations for the developed country group turned from positive during the first sub-period (1980-2000) to negative during the second sub-period (2001-2010). Connecting these results with previous literature, we proposed the reasons of rebound energy use derived from certain leisure activities which were more energy-intensive if excessive non-working time provided.