As we return from our winter holidays, many of us likely feel that we could take another couple of weeks off to work to recover from the end-of-the-year chaos. That feeling is justified when we look at how little time off American workers receive comparative to workers in other nations with advanced economies.
Workers in the United States receive, on average, far fewer paid vacation days or paid holidays when compared to other nations with advanced economies. What accounts for this discrepancy in paid time off? Two possible explanations lie in economy and culture. Tax rates are lower in the United States than in many other countries, which means laborers who work more, reap more rewards in the U.S. Culture may also play a role in increased working hours, examined later in the post.
Below is a graph of average annual hours worked by country and year according to the OECD. This includes only employed workers and certain countries on extreme ends of the average working hours spectrum. For some perspective, keep in mind that 2,000 hours annually amounts to about 38 hours a week, assuming workers put in hours all 52 weeks of the year. You can see below that countries like the Netherlands, Germany and Norway all work, on average, far fewer hours than countries like Hungary, Israel, Italy or the United States. Germany has one of the strongest economies in the European Union and Italy one of the weakest.
Examining GDP per capita for 2012 from the World Bank vs. average annual hours worked in 2012, you can see a negative correlation between the two. As GDP per capita increases, average number of working hours decreases. The United States skews slightly high in average annual hours worked based on our GDP per capita.
Laws in the U.S. do not mandate that employers allow a certain amount of paid vacation time or holidays, which partially accounts for the high average annual working hours in the United States. The graph below represents only paid time off as required by law in 21 economically advanced countries, 16 European countries, Canada, Australia, Japan, the United States and New Zealand. Thus, in the graph below the United States shows zero paid holidays or paid vacation time because there are no laws stipulating paid time off requirements.
However, American employers generally offer much more vacation time and paid holidays than the law stipulates. On average, the group with the highest paid time off are the employees who are in the top 25% of hourly wage workers. Even with combined paid vacation days and paid holidays, the top 25% of hourly wage workers get a combined 26 days of paid time off, still not very impressive when compared to the average of countries who rank highest in paid time off like Austria, Portugal or Spain.
American values may dictate this paltry showing of paid time off. The World Values Survey asks respondents to weigh certain values on a scale of 1-10 based on importance. In the graph below, we can see that Americans value success above work or leisure time. Interestingly, Europe values work higher than Americans do, suggesting that Americans value the result of the work (success), whereas Europeans value the process itself. Europeans also place heavier importance on leisure time than Americans do, which is demonstrated in their more liberal paid time off in the graphs above.
What causes Americans to work so much? Answering that question requires examining the many nuances in taxes, incomes, cultures and more; broken down by industry sectors, socioeconomic status, etc. If you’d like to try your own hand at behavioral economics, sign up free for DataHero and download the datasets.
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