The Decline in Average Hours Worked in Ireland

The decline in average actual hours worked has become a salient feature of labour market developments in many advanced economies. Ireland is no exception, with average hours falling by 6.5 per cent between 2019 and 2024 despite record employment growth in the pandemic-recovery period. This analysis aims to address two questions: which demographic groups are driving this decline and what are the contributing factors among these groups. Using Labour Force Survey microdata, a combination of decomposition and regression approaches outline that behavioural changes are the dominant driver of aggregate decline in recent years. This contrasts with the greater role of compositional factors in the aftermath of the global financial crisis which led to higher average hours worked. Lower average hours reported amongst men and parents in recent years is in line with international findings for middle-to-high income economies. Factors such as labour hoarding, work absences and increased secondary employment are estimated to have contributed marginally to the aggregate decline in hours worked in recent years. These limited contributions are in part coincidentally driven by more fundamental behavioural and compositional factors explaining the longer-run decline in average hours worked and the related changing patterns of labour supply.