Holger Görg, Olivier N. Godart, Aoife Hanley, Christiane Krieger-Boden08 July 2014
Many firms are replacing traditional working hours with more flexible arrangements, reflecting new thinking on employee motivation. This column presents evidence from Germany that trust-based working time is associated with increased innovation. However, trust-based working hours also contribute to the blurring of workers’ professional and private lives, and may lead to excessive overtime. Careful design of trust-based working arrangements is required to reap the innovations gains while avoiding the health pitfalls.
The organisation of work has changed dramatically over the last few decades. In particular, the formerly rigidly regulated working time has been replaced by flexible working hour schemes in numerous firms around the world. Taking Germany as an example, in 2010, 36% of employees were entitled to some form of flexible working hours scheme (Figure 1).
People have fewer friends and visit them less often than in the past. A popular explanation suggests that we’re working longer and have less time for friends, but recent research finds little tradeoff between working hours and social hours. The relevant tradeoffs, this column suggests, are between types of social interaction.
Americans do work more than Europeans, but please don’t think that Europeans are lazy
Claudio Michelacci, Josep Pijoan-Mas17 September 2007
Today Americans work much more than Europeans, while this was not the case back in the 1970s. Have Europeans become lazier than Americans? Arguably not: differences in working time across the two sides of the Atlantic simply reflect differences in workers incentives over their working life.
The aggregate amount of hours worked in the US and in Continental Europe has evolved quite differently over the last 35 years. In the 1970s the average number of working hours per capita was slightly larger in European countries such as France, Italy, and Germany than in the US. Today Americans work around 30% more than Europeans. These differences are important and they explain almost all existing US-Europe differences in GDP per capita: GDP per capita is today 30% higher in the US than in France or Germany, while productivity, measured by GDP per hour worked, is roughly equal.
Since the 1970s, the number of hours worked per employee has fallen substantially in continental Europe, while it has remained roughly constant in the US. The authors of CEPR DP6314 show that this divergence in the number of hours worked per employee on the two sides of the Atlantic can be explained by the evolution of the respective labour market conditions over the last three decades.
Since the 1970s, the number of hours worked per employee has fallen substantially in continental Europe, while it has remained roughly constant in the US after reverting a trend of secular decline. Using data from the Panel Study of Income Dynamics in the US and the German Socio-Economic Panel, the authors of CEPR DP6314 show that this divergence in the number of hours worked per employee on the two sides of the Atlantic can be explained by the evolution of the respective labour market conditions over the last three decades.
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