Labor Productivity

Balancing Work and Leisure

Dutch productivity per hour is among the highest in the world, but due to the low number of working hours, Dutch productivity per work year is less impressive.

Labor Productivity

Long holidays and short working weeks mean that the number of working hours Dutch employees put in, both during a year and during their whole working life, is much lower than in most developed countries. Included in the money transferred to American writer Russell Shorto’s bank account was “vacation bonus.” In May his employer paid him roughly an extra month of salary. Shorto: “This money materializes in the bank accounts of virtually everyone in the country just before the summer holidays; you get from your employer an amount totaling 8 percent of your annual salary, which is meant to cover plane tickets, surfing lessons, tapas: vacations. And we aren’t talking about a mere ‘paid vacation’ – this is on top of the salary you continue to receive during the weeks you’re off skydiving or snorkeling.”

Labor participation

Labor participation is also low because many women prefer part-time jobs, in order to combine a career with actively raising children, since – compared to other Western countries – school meals, day care facilities, nannies and aupairs are rare in the Netherlands. Until the 1960s, married women in the Netherlands only seldom had paid jobs. This changed from the 1970s onwards and nowadays the Netherlands is among the leading European countries in female paid employment. However, many economists and politicians argue women should seek full-time jobs, both in the interest of their careers as well as the national GDP.

Retirement in the Netherlands

Something similar applies to retirement. In the 1980s, when unemployment was high, schemes to enable employees to retire early were popular. The Dutch usually consider that working until one’s early sixties is enough, allowing for a couple of years to enjoy retirement in fairly good health. In most branches of the economy, it has become possible to take early retirement from age 60 or 62. In fact, in some jobs, like garbage collecting, bus driving or primary school teaching, virtually no-one reaches the mandatory retirement age of 65.

The effect of the Dutch welfare state is that the Dutch are able to refuse low paid jobs. This is immediately visible to anyone visiting the Netherlands. Compared to an American restaurant, a Spanish bank or a Hungarian department store, the Dutch equivalent is poorly staffed. As the Dutch nevertheless eat out, do financial transactions and buy goods, these low staff levels turn up in the economists’ statistics as high productivity per hour. The welfare state allows the Dutch to have a preference for paying people to stay at home instead of working in humble jobs. This has become a real preference, with many Dutch feeling ill at ease when they are in overstaffed banks or restaurants. Whether it would not be better for people to work in low paid jobs rather than getting paid to do nothing, is a matter of debate.

Article from "Discovering the Dutch". Click here  to get a copy now.

Long holidays and short working weeks mean that the number of working hours Dutch employees put in, both during a year and during their whole working life, is much lower than in most developed countries. Included in the money transferred to American writer Russell Shorto’s bank account was “vacation bonus.” In May his employer paid him roughly an extra month of salary. Shorto: “This money materializes in the bank accounts of virtually everyone in the country just before the summer holidays; you get from your employer an amount totaling 8 percent of your annual salary, which is meant to cover plane tickets, surfing lessons, tapas: vacations. And we aren’t talking about a mere ‘paid vacation’ – this is on top of the salary you continue to receive during the weeks you’re off skydiving or snorkeling.”

Labor participation

Labor participation is also low because many women prefer part-time jobs, in order to combine a career with actively raising children, since – compared to other Western countries – school meals, day care facilities, nannies and aupairs are rare in the Netherlands. Until the 1960s, married women in the Netherlands only seldom had paid jobs. This changed from the 1970s onwards and nowadays the Netherlands is among the leading European countries in female paid employment. However, many economists and politicians argue women should seek full-time jobs, both in the interest of their careers as well as the national GDP.

Retirement in the Netherlands

Something similar applies to retirement. In the 1980s, when unemployment was high, schemes to enable employees to retire early were popular. The Dutch usually consider that working until one’s early sixties is enough, allowing for a couple of years to enjoy retirement in fairly good health. In most branches of the economy, it has become possible to take early retirement from age 60 or 62. In fact, in some jobs, like garbage collecting, bus driving or primary school teaching, virtually no-one reaches the mandatory retirement age of 65.

The effect of the Dutch welfare state is that the Dutch are able to refuse low paid jobs. This is immediately visible to anyone visiting the Netherlands. Compared to an American restaurant, a Spanish bank or a Hungarian department store, the Dutch equivalent is poorly staffed. As the Dutch nevertheless eat out, do financial transactions and buy goods, these low staff levels turn up in the economists’ statistics as high productivity per hour. The welfare state allows the Dutch to have a preference for paying people to stay at home instead of working in humble jobs. This has become a real preference, with many Dutch feeling ill at ease when they are in overstaffed banks or restaurants. Whether it would not be better for people to work in low paid jobs rather than getting paid to do nothing, is a matter of debate.

Article from "Discovering the Dutch". Click here  to get a copy now.

Further reading

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