Play hard, shirk hard? The effect of bar hours regulation on worker absence

Summary

Government influence on labour supply behaviour through taxation and transfer policies is well understood. However, they also act to regulate the timing and extent of leisure activity. This has the potential to influence labour-leisure decisions. Legislative changes in bar opening hours provide a potential quasi-natural experiment of the effect of government regulation on working effort. This paper examines two recent policy changes, one in England/Wales and one in Spain that increased and decreased opening hours, respectively. A robust positive causal link between opening hours and absence is demonstrated. This indicates that alcohol policy has the potential to influence workforce productivity.