The Korean government emphasized positive effects of reduction of legal working hours. However, it seems that the government`s conjecture based on optimistic forecasting, considering that reduction of legal working hours will cause increased hourly wage rates and thus worksharing may not be realized as expected. First of all, increase in hourly wage rates will motivate firms to adopt more capital-intensive technology. Furthermore rising hourly wage rates may be transferred to price hike which results in decreases in both number of employment and hours worked since labor is derived demand of total output(scale effect). Secondly, as working hours of existing workers decrease, they may seek for another job(moonlighting) in order to compensate reduction of total earnings. Thirdly, since skill distribution is different among employed and unemployed, it is difficult to expect employment generation due to reduction of legal working hours. Finally, noncompliance ratio becomes higher when the composition of establishments is higher whose actual working hours are much longer than the legal working hours. The study shows that hourly wage rates increase is higher for the firms whose real working houes is long. Thus, the firms whose working hours are long may have more incentive to change the rotation system in an effort to subdue unreasonably large increase in total wage bill. KLI`s claim that reduction of legal working hours will facilitate worksharing and increase potential GDP seems to be based on optimistic forecasting. We may consider that the causality may work on the other way around. That is, if hourly wage rates rise as a result of reduction of regal working hours, the followings may occur: 1) weakening competitiveness of firms → reduction of output and thus labor demand. 2) wage hike → adopt more capital intensive technology → decrease in labor demand 3) wage hike → intensify outsouring or prefer oversea rather than domestic investment → decrease in domestic labor demand Considering the above, I conclude that it is reasonable in economic aspects to adopt legal working hours of 40 hours per week when Korean firms real working hours become close to 40 hours per week as were the case of most of industrialized countries.