Dissecting the Decline in Average Hours Worked in Europe

By Diva Astinova, Romain A Duval, Niels-Jakob H Hansen, Ben Park, Ippei Shibata, Frederik G Toscani

January 12, 2024

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Format: Chicago

Diva Astinova, Romain A Duval, Niels-Jakob H Hansen, Ben Park, Ippei Shibata, and Frederik G Toscani. Dissecting the Decline in Average Hours Worked in Europe, (USA: International Monetary Fund, 2024) accessed November 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

Three years after the COVID-19 crisis, employment and total hours worked in Europe fully recovered, but average hours per worker did not. We analyze the decline in average hours worked across European countries and find that (i) it is not cyclical but predominantly structural, extending a long-term trend that predates COVID-19, (ii) it mainly reflects reduced hours within worker groups, not a compositional shift towards lower-hours jobs and workers, (iii) men—particularly those with young children—and youth drive this drop, (iv) declines in actual hours match declines in desired hours. Policy reforms could help involuntary parttimers and women with young children raise their actual hours towards desired levels, but the aggregate impact on average hours would be limited to 0.5 to 1.5 percent. Overall, there is scant evidence of slack at the intensive margin in European labor markets, and the trend fall in average hours worked seems unlikely to reverse.

Subject: Gender, Labor, Labor force participation, Labor markets, Labor supply, Population and demographics, Women

Keywords: Europe, Full time worker, Hours worked, Labor force participation, Labor market, Labor markets, Labor supply, Policy reform, Scant evidence, Summary statistics, Women, Worker level, Working hours

Publication Details

Pages:

44
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2024/002
Stock No:

WPIEA2024002
ISBN:

9798400261183
ISSN:

1018-5941

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