The effect of work hours on energy use: A micro-analysis of time and income effects

In the environmental movement there is an idea that a reduction in work hours could be good for the environment. This idea is especially forceful since shorter work hours have possible positive consequences such as less time pressure and more time for activities which are important for subjective well being like social contacts, volunteer work and child care. This paper aims to contribute to the understanding of this issue, analyzing the impact of work hours on energy use and greenhouse gas emissions. We use a micro-data approach analyzing how a change in work time affects the energy use of households via changing income and changing time use patterns. We assume that a change in work hours gives a proportional effect on income. We identify the marginal consumption through carrying out linear regressions. In addition we make similar regressions in order to estimate how the time is used when work hours are changed. The regression results are matched with energy intensities and greenhouse gas emissions per expenditure and per minute of time use. The results of this study indicate that an increase or decrease in work time by 10 percent gives a change in energy use and greenhouse gas emissions by about 8 percent on average, a bit less for high income households and a bit more for low income households. The increase or decrease in energy use with work hours is dominated by the effect of income. The effect due to more available time for leisure activities is more than an order of magnitude smaller than the income effect.