Trends in hours worked in Australia

The graph below tells you the average number of hours worked in Australia from 1978 to 2013 per person per month aged 15-64. The key thing to note is that there has been remarkably little change over time in terms of the peaks of the cycle: in 1980 the average Australian between 15 and 64 worked 101 hours a month, and in February 2013 the average Australian worked 102 hours a month, an increase of 1%.

Presentation1

 

The increase is almost 4% if we compare the 1980 peak with the 2007 peak, but there is an argument to be made that this is because the 2007 peak represents a larger boom than the 1980 peak and that we should really compare it with the peak in the 1960s.

Presentation2

Source: centrum voor beleidsstatistiek 04003, Pieter Al and Robert Selten

Unfortunately, the data on hours only started in 1978 for Australia so it is actually not so easy to know whether 1980 was really comparable in terms of an economic boom with the very long boom we have had in the 00’s. To look at this a bit more, we can look at data for a country with a very similar labour market structure as Australia that has longer series on hours, i.e. the Netherlands. The graph on this (see above, which is now hours per person of any age so not completely comparable) shows that, indeed, the peak in terms of hours worked per person was in the 1960s and that there was a rebound early 1980s after the oil shocks of the early 70s, but that even the peak in the early 2000’s was not as high as the highs of the 1960s. And in case you are wondering, labour force participation in both countries rose during this period, particularly amongst women, and are currently nearly identical for both countries (63.3% in the Netherlands, 65% in Australia), with the two countries leading the world in rates of part-time work.

The moral of the story? After 45 years of dramatic changes in labour laws, welfare provisions, industrial structure and attitudes to female employment, we work just as many hours in formal employment.

 

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conrad
conrad
8 years ago

“The moral of the story? After 45 years of dramatic changes in labour laws, welfare provisions, industrial structure and attitudes to female employment, we work just as many hours in formal employment.”

I have two independents thoughts about this, which suggest that the moral is not as good as it could be:

1) I assume that the actual distribution of hours worked is different — Given that the female graph goes up and the male one down, I imagine more people are working part time. If that is correct, and if workforce participation is relatively stable (which it is), it should pull the average down, but it doesn’t. That suggests full-time workers are probably working more hours than previously to pull up the average due to more part-time workers. So there is a group that works more. Unfortunately, we don’t know whether they want to and whether the part-time workers are happy with their status.

2) Initially I thought that if we worked about the same number of hours, perhaps our lives would be more leisurely because we would would be doing less in terms of other stuff that is generally not liked, like washing, thanks to technology. However, then I wondered if larger houses that need more work and sitting in traffic would actually make up for this, so perhaps our lives are really worse in terms of leisure, despite similar working hours. If this is correct, the moral is that people are good at thinking of ways to make their lives more miserable in case they are enjoying it too much, and so if we worked more, we might not love other things as much. This is the case in some parts of Asia — once everyone has to work crazy hours, they like to live on top of train stations so they don’t waste so much time getting to work and back.

Paul Frijters
Paul Frijters
8 years ago
Reply to  conrad

Hi conrad,

yes, the distribution of formal hours has changed a lot. More is done by women and less by young people who are in education longer. It is only on average that we work as long.

It is weird though that the number of hours is so fixed over time. There is little in standard (or non-standard) economics to make that seem logical. Work is not a fixed-pie game, the demand for home production has clearly decreased, more people want jobs. Its a bit of a mystery why the thing is so constant and has not changed much more wildly.

conrad
conrad
8 years ago
Reply to  Paul Frijters

It is very curious, especially going back to the 50s, where I would have incorrectly guessed that people would have worked less due to fewer women in the workforce. But this is not the case (although presumably this idea is countered by a younger male population).

Perhaps the idea of how much work gets done needs to take into account some some sort of equilibrium based on human characteristics like how willing people are to invent random stuff to do, and whilst there may be essentially infinite stuff people could potentially do, they also need to be smart enough to actually do it and think of it. So perhaps a constraint is just how smart your population is in thinking of this sort of stuff and how willing the rest of your population is to assimilate it and use those things that are thought of.

For example, I can’t help but notice that compared to when I was young, there is now a massive service culture doing things no-one actually needs but are just nice to have, like cafe culture, where you buy a coffee and food instead of making your lunch. More recently, a number of those industrious immigrant groups, who I think are a very good example of people with a very good ability to think of work to do that you didn’t know existed, seemed to have invented any number of cosmetic things that are mainly directed at women (toe-nail painting etc.). If these people wern’t industrious and if people didn’t want to buy these services, then presumably we would just have less work over all. But they can’t help themselves — they have to work, and if they are displaced from doing something they simply think of something else to do. But there is a limit to this, as they actually need to be able to think of things to do and presumably not all of them are smart enough to do this. So you never end up with really high hours as there just arn’t enough smart people.

This might also be bounded by how hard it is to invent new things to do. It seems to me that if very few people are willing to offer the type of things that arn’t necessary but just nice, it should be pretty easy to do these things. Alternatively, the more people that do, the harder it will be due to competition, so you either can’t do it, or need to think of something else. Perhaps this problem means that the more people work, the harder it is to actually think of new things to do — so perhaps the difficulty of thinking of new things is actually exponential after a certain level, which would put pretty strong bounds on maximal hours worked except under special circumstances.