« "Not enough money" | Main | Beyond redistributive tax »

April 23, 2017


Matthew Moore

Why don't we work just one day per year? I'm sure we would be super productive.

There's no mystery about diminishing marginal returns. The question is whether the marginal return still exceeds the cost. That's how total benefit is maximised, not maximising average output per hour by reducing hours worked.



Is it better for one employee to work 40 hours producing 100 units, or for two employees working 20 hours each and producing 120 units in total?



Better for who or for what?

Looks like better productivity, and GDP gets a boost if they both travel 50 miles to work every day..

But then neither of them will have much free cash, if any, so in the UK consumer driven economy it would be disastrous....

I am no great thinker, or economist, but I believe that very few policies are nowadays thought through to their inevitable fate...

Many result in totally opposite effects!

Ralph Musgrave

If people choose to work longish hours because they want to maximise their income by any means possible, what right does Chris or anyone else have to stop them? And people DO HAVE a choice as to how many hours they work: they can choose part time rather than full time work for example.


Ralph, I'd take issue with both sentences of your comment. I think I have a legitimate interest in regulating the hours worked by, say, lorry drivers. Their tiredness could kill me, and when I cross the road, I have no way of knowing how much they've driven that week.

Also people don't necessarily have the choice of partvtime work - I worked at a firm that allowed 4 day weeks, but not three day weeks.

Ralph Musgrave

Luke, Where 'elf 'n safety is involved, fair enough: regulating hours is a good idea.

Re the firm you worked for, that particular firm may not have allowed part time work, but there are plenty of employers to choose from. Obviously it is not always easy for a particular employee to find an alternative employer in a hurry. But wait long enough, and one will appear in the situations vacant columns.


Ralph, I sort of take your point. But " But wait long enough, and one will appear in the situations vacant columns."

Is that actually true for insurance litigation law firms - the area I was talking about? And will it pay the same pro rata as a five day week? (There's good or at least arguable reasons why it might not.)

Matthew Moore

@TickyW - lump of labour fallacy. Doesn't apply, particularly when employment is at a record high / unemployment is at a record low.

Also, note that if this was true, companies would already being doing it, and turning a nice profit as well as increasing wages.

Andrew Pearson

There's probably a significant difference between reducing hours in a typical week and increasing the number of holidays, though. More holidays will raise productivity somewhat due to Parkinson's Law and diminishing marginal returns, but it's unlikely to do a great deal to reduce fatigue except on the day or two immediately following the new holidays.

Ben Oldfield

I can relate a practical example when many years ago I was working as a Mine Captain. I took over resposibility for one section of the mine and discovered that the development miners had been working seven days per week for the previous nine months. The was done to increase the rate of tunnel advance. When I introduced 6 days a week working the tunnel advanced per week increased despite working only 6 days instead of 7.


"there are plenty of employers to choose from"

Please, no alternative facts here.

In most of the world, and UK of course, it's exactly the other way round: the vast majority of workers, afraid of unemployment and confronted with companies that offer the same standard work hours, all of them, have little to no freedom of choice at all. Since workers can't choose, they effectively work longer than they'd prefer. Only very few workers, in very few industries, really have that choice.

derrida derider

Can't you explain all this with the observation that people actually get tired? That is, marginal product is diminishing in annual hours. The French don't work their least productive hours.

Of course, a neoliberal may also claim that one reason French labour productivity is high is compositional - they keep their least productive people out of work ...

derrida derider

The more technical argument for enforcing shorter working hours comes out of search theory.

It's of a piece with the best argument for high minimum wages and strong unions: that it can shift things to an equilibrium where lots of high paying jobs is actually more profitable for employers. See all that Daron Acemoglu "good jobs/ bad jobs" stuff.

Like a lot of the "New Labour Economics" it actually has some pretty impressive empiric support.


Exactly what DavidM said, the supply of labour is millions of people greater than the supply of labour, even in quite benign economic times. There's no way workers can collectively just "choose" to work elsewhere, even if some individual ones can.



*greater than the demand for labour

The comments to this entry are closed.

blogs I like

Blog powered by Typepad