An economic argument for more public holidays

Economists are always coming out with crazy findings. Take this paper, for example. It turns out that public holidays are good for social life. Who woulda thunk it?

Keeping in Touch – A Benefit of Public Holidays
Joachim Merz and Lars Osberg
This paper argues that public holidays facilitate the co-ordination of leisure time but do not constrain the annual amount of leisure. Public holidays therefore have benefits both in the utility of leisure on holidays and (by enabling people to maintain social contacts more easily) in increasing the utility of leisure on normal weekdays and weekends. The paper uses the variation (13 to 17) in public holidays across German Länder and the German Time Use Survey of 2001-02 to show that public holidays have beneficial impacts on social life on normal weekdays and weekends. Since these benefits are additional to the other benefits of holidays, it suggests that there is a case to be made for more public holidays.

The bleedin obvious aside, the paper does make an oft-forgotten point, which is that holidays aren’t just another day off, but serve as a coordinating device (eg. I’d like to take a holiday with my best friend and his family, but we just can’t persuade our bosses to let us take holidays in the same week, so we use a long weekend). We may want to allow people more opportunities for such social coordination.

Another argument for considering more public holidays is that in the WorkChoices era, when penalty rates are fast-disappearing, a public holiday really only changes the default position. If worker and boss both think that working on a public holiday is preferable, they can contract for the worker to work the holiday. But as behavioural economics teaches us, changes in default positions can often have a much bigger impact than rational economics would lead us to expect. And changing the default position can often boost social welfare.

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4 Responses to An economic argument for more public holidays

  1. Peter says:

    There is, of course, a larger social argument in favour of universal holidays — that they encourage the creation of solidarity across an entire society. Anzac Day, for example, reminds everyone of personal sacrifices made by earlier generations for the future. Most public holidays in most countries were created for this wider social reason.

  2. Patrick says:

    May Day being the exception, created to sustain the dream of universal subjection to the fascist, oops damn sorry liberation under the socialist yokeutopia:)

  3. Peter says:

    I said “most” rather than “all” since I think religious public holidays were not created in order to boost social solidarity, but usually because legislators believed it was innappropriate or immoral for people to work on those days.

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