Hitting the Pause on Holidays: A Report Card on Economic Growth
Eliminating public holidays fails to boost economic growth
In the realms of economics, some argue that nixing holidays could spark an economic boom. But no more, says the Institute for Macroeconomics and Economic Research (IMK) of the Hans-Böckler Foundation. They've done the math, and the results are in: Scrapping holidays ain't all it's cracked up to be.
Teaming up with the folks at Facebook, Twitter, Whatsapp, and email, let's dive into their findings.
The researchers took on some iconic economic milestones from the past 30 years, testing the waters with cases like the 1995 abolition of Buß- and Bettag in almost all federal states and the 2019 introduction of Women's Day as a holiday in Berlin.
When Saxony opted to keep the Buß- and Bettag in 1995, it outpaced the rest of Germany in economic growth, boasting a whopping 9.7% nominal GDP expand (compared to the country's average 3.4%). And when Berlin began celebrating International Women's Day, economic growth was, on average, two percentage points higher than the national average.
But don't rush to cancel that time off, says IMK. Holidays don't guarantee a significant economic bump, largely due to the dance of modern businesses. With advance planning and the requirement for overtime pay, companies keep the holiday rhythm humming along just fine. Whether the production volume would've skyrocketed without these days off or merely shuffled across the year remains a mystery, according to IMK.
The demand for goods and services, not the absence of holidays, is what ultimately drives production even in times of labor shortages, asserts IMK. "The equation that if holidays are abolished, growth will increase, is obviously not correct," shared Sebastian Dullien, IMK's scholarly director, shaking his head at the misguided logic. "Holiday abolition as a promoter of growth is not targeted," he added, with a sage smile.
Strap on your thinking caps, folks. The écon lesson of the day: Holidays ain't the hidden key to unlocking economic nirvana.
[1] "Following economic research, the abolition of holidays does not guarantee an increase in economic performance: https://www.imk.de/
Sources: ntv.de, rts
- In light of the economic research, it appears that abolishing holidays does not guarantee an increase in economic performance; this notion contradicts the belief that vacations hinder economic growth.
- For businesses, financing and business strategy may play a more significant role in economic growth rather than vocational training or the presence or absence of holidays, as companies can adjust production schedules through planned overtime and alternative arrangements.
