The Declining Work Week

Abstract

Over the past five years average hours per worker, as recorded in the Household Labour Force Survey, have trended downwards. According to the frequently used measure of average hours per worker, total hours divided by total employment, people are now working 5% fewer hours than they were in 2004. This has contributed to weak growth in labour input over recent years. This paper uses data from the Household Labour Force Survey to examine what is behind the recent fall in hours worked per worker. It attempts to answer whether the fall has been due to compositional changes, such as population ageing and increased participation of women, or whether people are just working fewer hours than they used to. This paper estimates that up to 40% of the fall in average hours over the past five years is due to increased annual leave entitlements, while compositional changes are estimated to account for around 11%. The remainder of the fall in average hours appears to be due to a decline in hours worked within jobs. Fewer people working long hours and firms hoarding labour over the recent downturn are identified as two of the key explanations for this.