The employment effect of deregulating shopping hours: Evidence from German retailing

We provide difference-in-differences evidence from Germany on the effect of deregulating weekday shop opening hours on employment in food retailing. Using data on the universe of German shops, we find that relaxing restrictions on business hours increased employment by 0.4 workers per shop corresponding to an aggregate employment effect of 3 to 4 per cent. The effect was driven by an increase in parttime employment while full-time employment was not affected. The statistical significance of these results hinges on assumptions on error correlation, and we hence report inference robust to clustering at different levels. A back-of-the-envelope calculation gives an employment increase by 0.1 workers per additional actual weekly opening hour.