Surprising International Comparison of Average Hours Worked

Featured on
WSJ

The conventional narrative about the European debt crisis largely accepts the contention that the periphery of Europe have different work habits and these account to a large extent the economic and financial problems. Yet often time the discussion takes on such ethnocentric dimensions that sometimes it is difficult to see what is real.

This chart: to the right illustrates what many will find to be counter-intuitive. The most recent data from the OECD covers 2008 and shows that in that year, Greek workers on average worked 48% more than their industrious German neighbors. The OECD data shows the average Greek worker spent 2120 hours at work compared with 1429 hours in Germany. Moreover, Greece is one of the only OECD countries in which workers were working longer in 2008 than in 1998. With 1802 hours at work, the average Italian employee spent more than 25% more time at work than the average German worker.

While many will be initially surprised by the data, on reflection it makes intuitive sense. In crude terms, wealthier countries typically work smarter--more capital intensively--than poor countries, not longer. Contrary to conventional wisdom, the lack of Greek competitiveness, for example, does not seem to lie in hours working but with the combination of productivity and wages/benefits (unit labor costs).

A more rigorous analysis would also include an analysis of the structure of the economy. In Greece, for example, the agriculture sector accounts for 4% of the value of added of the entire economy, which is among the highest in the OECD. In contrast, in most euro zone countries, the agricultural sector accounts for 2-3% of the value-added, and in Germany only 1%. In contrast, the 73% of the value-added in the Greek economy is derived from services, which is at the upper end of the euro zone community. The German service sector accounts for 69% of the value-added in the economy.