More productive economies allow their citizens to work shorter hours
- The key driver of rising
incomes and decreasing working hours is productivity growth. To understand working hours the key metric
is labour productivity: the economic return (ie. money earned) for one hour of work.
- At the most concrete
level, labour productivity represents things like the number of breads that a baker bakes
in an hour, or the number of cars factory workers assemble in an hour.
- Higher labour
productivity is
associated with fewer working hours, as shown in the chart here with labour
productivity on the horizontal axis and annual working hours on the vertical axis.
- However this doesn't
necessarily mean that workers in more productive economies work shorter hours, as shown by Singapore and USA which both have very high productivity
but work many more hours than their counterparts with similar productivity.
- The vertical axis shows
the
average hours worked per year
by a resident of the country per year. The horizontal axis shows the average productivity
(International$ earned per hour)
- Try hovering over some
countries
and
you should see the total annual hours worked, along
with their average productivity ($ earned per hour):
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