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Dissecting the Decline in Average Hours Worked in Europe

Author

Listed:
  • Diva Astinova
  • Mr. Romain A Duval
  • Mr. Niels-Jakob H Hansen
  • Ben Park
  • Mr. Ippei Shibata
  • Mr. Frederik G Toscani

Abstract

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.

Suggested Citation

  • Diva Astinova & Mr. Romain A Duval & Mr. Niels-Jakob H Hansen & Ben Park & Mr. Ippei Shibata & Mr. Frederik G Toscani, 2024. "Dissecting the Decline in Average Hours Worked in Europe," IMF Working Papers 2024/002, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2024/002
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    Keywords

    hours worked; working hours; labor market; Europe; policy reform; worker level; scant evidence; summary statistics; full time worker; Labor markets; Women; Labor supply; Labor force participation;
    All these keywords.

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