Productive hours

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“Work more to earn more” was former French president Nicolas Sarkozy’s refrain in his 2007 election campaign. But does working more hours mean the economy is better off?

Not necessarily. Take Greece, where the average number of hours worked per worker is among the highest in the OECD area, second to Korea (see chart). And while in Greece the number of hours worked has steadied since the crisis started, averaging 2,121 hours per worker per year in 2008–2010, in Germany each worker clocked up 1,412 hours per year in the same period, down from 1,431 hours in 2005–2007.

So, why is the Greek economy not doing better than the German one? There are a number of factors at play. For a start, the employment rate is higher in robust economies such as Germany and Sweden, at over 70% of the workforce, than in Greece, where it has hovered at around 60% for a decade. Economic structure also counts, with some low skilled services jobs, in catering and tourism for instance, being labour intensive but less productive than, say, manufacturing technology where value-added is high. The trouble is, while productivity is much lower in Greece than in Germany, wages are not correspondingly lower, which makes many Greek firms uncompetitive. In short, higher real output per hour worked is generally associated with lower annual hours per worker, so that working long hours is not enough for countries to earn more.



©OECD Observer No 292, Q3 2012

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