AbstractUnemployment is at present one of the main economic problems in most Western countries. Shortening working hours and lowering retirement age have both been proposed as useful means of reducing this problem. Discussion of these measures has been conducted mainly at the macroeconomic level, however, and the consequences of such policies on the labor market have been evaluated differently by employers' groups and labor unions. These different evaluations clearly reflect conflicting political viewpoints but may also arise from the fact that little economic research has been performed in this field. To assess the economic implications of shortening working hours, the author has undertaken a microeconomic investigation to identify the dynamic consequences, especially on staff recruitment and on labor‐capital substitution. This article describes the basic structure of the system dynamics model applied in the stud
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