Eid Al Fitr and other national holidays improve worker productivity

I need an officially recognised national holiday to help the global economic recovery.
I need a holiday.

Not for any selfish desire to bunk off and enjoy myself, you understand. No, I need a holiday to help the global economic recovery.

And not just any kind of holiday. I need an officially recognised national holiday, much like the two days awarded by the Federal government of the UAE to enable us all to celebrate the joys of Eid Al Fitr and the end of the holy month of Ramadan.

The Organisation for Economic Cooperation and Development, and all manner of other economic bodies, compile endless economic data to help people like me and other far more serious commentators to come up with the theories we expound on what makes the financial world tick.

I was looking quite recently at some productivity data that showed GDP in relation to how many hours and days were worked by each worker in a certain country's workforce.

Within this fascinating data set was mention of how many days a particular country awarded as mandatory national holiday. The results were quite surprising.

You might imagine a country that awards a large number of mandatory national holidays would not be among the most productive on Earth, simply because its workers are forced to be absent more than their foreign counterparts and are therefore off to a bad start.

Plus a day off for a national holiday often entails far more than a day off, a fact to which anyone with a job could attest.

Most national holidays, as is the case with this week's Eid, come at the beginning or the end of a working week, leading many to take a couple of days' vacation either side to stretch the long weekend a little further.

Those who don't do this invariably wind down to the holiday for a day or two and spend another or more winding back up, meaning they are not at their most productive for almost two whole weeks thanks to just one official day off.

This imagining, based on anecdotal reports from those around me I might add, may in fact be the case in almost every place of work around the world when it comes to nationally recognised holidays like Eid, Christmas and the Fourth of July.

But there is evidence to show that in those countries where the holiday is federally mandated productivity growth actually improves quite significantly the more days off are granted.

Take China, the most productive emerging economy on Earth, as a prime example.

China has more mandated public holidays than any other country.

Workers in the People's Republic get a staggering total of 28 days of national public holiday a year. They get three days off for the new calendar year on January 1; seven days for Chinese New Year in February; three days for the Qingming fifth solar term festival in April; three days for labour day in May; three days for the Dragon Boat festival in the fifth lunar month; three days for the mid-autumn festival in the eighth lunar month; and finally three days for national day starting on October 1.

Many of these holidays start on a Friday and include a weekend, but are no less valid as a great many Chinese workers work a seven-day week.

Productivity per capita may be much higher in the United States where there are, contrary to popular belief, absolutely no national holidays in the true sense - not even Christmas and the Fourth of July - but productivity growth is way behind China.

Chinese productivity per capita is growing at about 9 per cent, whereas in the US it is limping ahead at just 0.3 per cent. Before 2008 there were actually more national holidays in China. But a complicated reform process did away with some of them and guess what? Productivity growth slowed by almost four percentage points over the next four years. There may have been other reasons, but I don't care. The national holiday argument is the strongest.

South Korea provides more great ammunition for those who favour more national holidays. Among OECD countries, South Korea is among those that award the most holidays, with 15 mandated days off each year. And with productivity growth up at more than 6.4 per cent, according to the latest data, Korean workers are certainly all marching to the beat of the same drum.

As are their Japanese counterparts, who came in joint first place with South Korea in the OECD with 15 national holidays and almost as impressive productivity growth, coming in at 4.1 per cent.

And that is perhaps the most obvious explanation. Workers in those countries with lots of federally mandated national holidays such as China, South Korea and Japan are indeed marching to the beat of the same drum.

They have strong national identities linked to labour and productivity. Indeed, Japan, China and Korea have specific important holidays that celebrate the worker and working life.

 

jdoran@thenational.ae

Published: August 8, 2013 04:00 AM

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