Hankyung Research Institute: "52-Hour Workweek System Worsens Corporate Performance Without Increasing Employment"

An analysis has emerged that the 52-hour workweek system worsens corporate performance without increasing employment.

On the 15th, the Korea Economic Research Institute announced in its analysis titled "The Impact of the 52-hour Workweek System on Corporate Performance" that the 52-hour workweek system did not have a significant effect on increasing employment. The original intention of introducing the 52-hour workweek was to reduce working hours and thereby create a job-sharing effect that would increase employment, but in reality, no employment increase was observed. Based on the 2017 and 2019 Business Panel Survey data, the analysis compared companies that adopted the 52-hour workweek system with those that did not, finding that the change in employment growth rate was -0.67 percentage points, a statistically insignificant figure.

The implementation of the 52-hour workweek system was also analyzed to have a negative impact on corporate management performance. The return on total assets of companies decreased by approximately 0.82 percentage points, and the return on equity also dropped by about 3.01 percentage points due to the 52-hour workweek system.

The report pointed out that since the 52-hour workweek system does not significantly affect employment growth rates but only reduces corporate performance, there is a need to seek efficiency through institutional reform. It emphasized the urgent need to advance ongoing labor market reforms and suggested that for flexible and selective working hour systems, the unit period and settlement period should be extended. Specifically, it called for the prompt expansion of the unit for managing extended working hours from a weekly basis to monthly, quarterly, semi-annual, or annual units, as currently discussed in labor market reform proposals.

However, it mentioned that when expanding the management units for extended working hours to quarterly, semi-annual, or annual periods, reducing the total extended working hours compared to the monthly unit could undermine the purpose of working hour flexibility, thus requiring reconsideration on this matter.

Yoo Jin-seong, Senior Research Fellow at the Korea Economic Research Institute, stated, “Reflecting industry demands, it is necessary to improve the system by expanding the unit period of the flexible working hour system to up to one year and extending the settlement period of the selective working hour system to up to one year, thereby enhancing efficiency.”

This content was produced with the assistance of AI translation services.