The impact of the overtime policy reform-evidence from the low-paid workers in Taiwan

This article investigates the effects of shortening standard workweek on workers with different income levels. Using two repeated cross-sectional survey data, the Taiwanese Manpower Utilization Survey and Human Resource Survey, we estimate the impacts of the new policy on working hours and monthly income. Our results show that the new standard workweek in Taiwan has made the working hours drop, but the scale of decrease becomes smaller in the following 3 years. Although the hours drop has gradually risen back for every worker, the rate of increase is higher for the low-income workers. The monthly incomes of the high-income female workers have decreased, however, the decreases in the hourly wage rates are less than their average wage rates. Our results also show that the firms have automatically adapted under the new law and a poor enforcement scheme after a period of time.