This paper examines the effect of Japan's reduction of standard hours in the 1990s on labor
market outcomes. Given that standard hours become discontinuous at certain establishment
sizes, we employ a regression discontinuity design to estimate the impacts of the policy
change. The theory predicts that policy change should unambiguously reduce hours worked
in establishments with an initial workweek longer than the new standard hours but shorter
than the old standard hours. The policy impact is expected to be zero for establishments with …