Junkcharts finds The Economist's chart on average annual hours worked per person in employment confusing. Great post. I think the concept of “hours worked per capita” is more suitable for making international comparisons. This measure reflects the combined impact of average hours actually worked by people with jobs, employment rates, and the age structure of the population.
The relative position of some countries in the working time stakes is quite different depending on whether working hours are measured on a per worker or a per capita basis. For example, Switzerland comes fourth out of 26 countries in terms of hours per capita although the actual hours spent working by individuals are well below the OECD average. This is explained by the fact that a relatively high proportion of people of working age in Switzerland have a job, while low employment rates explain why per capita hours are relatively low in Greece and Mexico, even though hours per worker are high.[1]
The chart to the right decomposes country differences from the OECD average in working hours per capita in 2002 into three components: the hours effect (i.e. the impact of deviations from the OECD-average hours per worker), the employment effect (i.e. the impact of deviations from the OECD-average employment-population ratio) and the demographic effect (i.e. the impact of deviations from the OECD-average for the share of working-age persons in the total population). It emerges that the hours per worker and employment effects explain almost all of the cross-country variation in hours per capita, while the age structure of the population has relatively little effect. Moreover, OECD countries with below-average annual hours per worker also tend to have above-average employment rates, and vice versa. An obvious question that arises is whether this apparent trade-off reflects a demand-side constraint (see lump of labor fallacy) affecting the total hours of work available or, instead, differences in long-run labour supply behavior (pdf, p. 28).[2]
[1] cp. Clocking in and Clocking out: Recent Trends in Working Hours, OECD Observer, October 2004
[2] OECD Employment Outlook 2004
The relative position of some countries in the working time stakes is quite different depending on whether working hours are measured on a per worker or a per capita basis. For example, Switzerland comes fourth out of 26 countries in terms of hours per capita although the actual hours spent working by individuals are well below the OECD average. This is explained by the fact that a relatively high proportion of people of working age in Switzerland have a job, while low employment rates explain why per capita hours are relatively low in Greece and Mexico, even though hours per worker are high.[1]
The chart to the right decomposes country differences from the OECD average in working hours per capita in 2002 into three components: the hours effect (i.e. the impact of deviations from the OECD-average hours per worker), the employment effect (i.e. the impact of deviations from the OECD-average employment-population ratio) and the demographic effect (i.e. the impact of deviations from the OECD-average for the share of working-age persons in the total population). It emerges that the hours per worker and employment effects explain almost all of the cross-country variation in hours per capita, while the age structure of the population has relatively little effect. Moreover, OECD countries with below-average annual hours per worker also tend to have above-average employment rates, and vice versa. An obvious question that arises is whether this apparent trade-off reflects a demand-side constraint (see lump of labor fallacy) affecting the total hours of work available or, instead, differences in long-run labour supply behavior (pdf, p. 28).[2][1] cp. Clocking in and Clocking out: Recent Trends in Working Hours, OECD Observer, October 2004
[2] OECD Employment Outlook 2004
Mahalanobis - am 2005-09-26 21:39 - Rubrik: EconoSchool
