Europeans are spending less time at work, and governments wish they would return to the grindstone. That is the main thrust of measures German, Dutch and British ministers have been exploring to persuade part-time workers to take more hours and full-time workers to accept overtime.
But the evidence suggests it will be an uphill battle – and that authorities worried about a shrinking workforce would do better to help people who otherwise wouldn’t want work at all to work a little.
Rising prosperity is the main reason why the working week has shortened over time, as higher productivity and wages have allowed people to afford more leisure time. In Germany, for example, it decreased by roughly half between 1870 and 2000. Across the OECD, people work an average of 50 fewer hours each year than in 2010, at 1,752 hours.
Average working hours have fallen more in recent years as the composition of employed people has changed, more young people are studying, more mothers are working, older people are gradually retiring, and long-hour manufacturing roles have been replaced by flexible jobs in the service sector.
The latest post-pandemic drop in European working hours is more of a puzzle. The European Central Bank estimates that at the end of 2023, eurozone workers worked an average of five hours less per quarter than before 2020 – equivalent to a loss of 2 million full-time workers.
A similar shift has occurred in the UK, where average weekly working hours at the end of 2022 are 20 minutes shorter than in 2019. The Office for National Statistics says this was due to lower full-time hours for prime-age men and was equivalent to . to employ 310,000 fewer people.
The trend appears to be European — no such recent change has been seen in the US, which simply laid off people instead of giving them time off during the pandemic.
One explanation is that employers have been “hoarding” labor – keeping workers idle while reducing work hours because they fear they won’t be able to hire easily when demand picks up. The ECB believes this was a factor, along with a rise in sick leave and rapid job growth in the public sector.
But BoE policymaker Megan Greene said earlier this month that while there was some evidence of labor hoarding, it was also “likely that . . . workers may just want a better work-life balance’.
A similar conclusion was reached by researchers from the IMF who examined the puzzle. They said the post-Covid decline in working hours was actually an extension of a long-term trend over the past 20 years that reflected worker preferences – with young people and fathers of young children driving the decline. The biggest change was in countries where incomes were catching up with wealthier neighbors.
However, some economists believe that the experience of lockdown made people more willing to trade money for a less stressful lifestyle and more able to leave work with anti-social hours.
“Many people have become more health conscious,” said one Frankfurt economist, noting that Germany, with one of the sharpest declines in working hours, suffered from high rates of depression and other mental disorders. United Kingdom.
Spain is traditionally at the opposite extreme. It has some of the longest working hours in Europe – combined with a long lunch break, which means many staff cannot work late into the evening, causing family life, leisure and sleep to suffer.
But even here customs are changing. Ignacio de la Torre, chief economist at Madrid-based investment bank Arcano Partners, thinks Spanish bars and restaurants have struggled to fill vacancies since the pandemic as former waiters have started training for better jobs.
In many countries, unions have made shorter working hours a focus of collective bargaining, and some employers are experimenting with offering four-day weeks – or more flexible working patterns – as a way to attract employees.
Changing habits is a challenge for European policy makers. With productivity growth weak, they fear that shorter working hours will exacerbate labor shortages, fuel inflationary pressures, slow growth and make it harder to finance social security systems.
Unless productivity growth improves, de la Torre argues, the only way to boost economic growth is to bring more people into the workforce, accept immigration or work longer hours. It is unrealistic to earn the same while working less: the result would be “a lower salary at the end of the month”.
But Anna Ginès i Fabrellas, director of the Labor Studies Institute at the Esade Law School, cites evidence that young people are willing to accept this trade-off and value free time “when they evaluate the quality of work”.
Some politicians believe that shorter working hours and greater welfare should be the goal. Spain’s Labor Minister Yolanda DÃaz caused a stir earlier this year by proposing that restaurants no longer have opening hours, and the governing coalition has promised to gradually reduce the legal maximum working week.
IMF researchers presented a more pragmatic argument.
Governments can and should do more to help people who want longer working hours, they said, including supporting retraining, job hunting and childcare, as well as promoting flexible working and removing perverse incentives in tax and benefit systems.
This will have little effect, the IMF estimates. Some policies simply “shift the clocks” between mothers and fathers. But in general, most people will want to work a little less if their standard of living rises. This means that there is a limit to what politicians can do.
A more realistic goal, according to the IMF, is to increase the total number of hours worked across the economy, not least through better parental leave policies, which could get more people into work in the first place. Recent trends in the EU are promising: labor market participation has increased since 2020.
That seems like a better approach to me. If employers offer better part-time work and flexible roles, people who might otherwise remain out of the workforce might at least work a little – and be happier for it. This would be more productive for governments than pushing against the tide.
delphine.strauss@ft.com