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Currently showing: Funding longer lives > Longevity risk

18 Sep 13 07:26

According to the (very left leaning) New Economic Forum, a shift to a 30-hour working week would "help to address a range of urgent, interlinked problems: overwork, unemployment, over-consumption, high carbon emissions, low well- being, entrenched inequalities, and the lack of time to live sustainably, to care for each other, and simply to enjoy life". Better still, they claim that the hours worked would be more productive, limiting the productivity loss, a claim that slightly undermines their other argument that such a move would bring more people into the workplace, contributing to social harmony and bliss.

It's a tantalizing thought for leisure-deprived professionals and one which, emotionally, I endorse strongly. Who wouldn't want to have more leisure time or a better life balance? There is also some strong supporting evidence in a 2007 report from the International Labour Organization which shows that there is little correlation between hours worked and economic development or productivity. In fact, as countries have gotten richer, working hours have fallen (though you could argue that today they're paying the price with huge trade imbalances).

That report also reveals that working hours have been reducing globally... just not as fast or dramatically as all of us would wish. In the Netherlands, for example, annual average working hours fell from about 3,300 in 1870 to around 1,300 in 2000. Excluding holidays, that's a 25 hour week, which is pretty good but still shy of Maynard Keynes' claim that his grandchildren's generation would enjoy a three hour working day.

In fact, while many of us may feel that we work far harder than we wish and fantasize about having more time, those of us living in developed countries appear to be living gilded lives in comparison to our parents or grandparents, with ample leisure time and only a small minority working more than 50 hours a week.

Despite this apparent luxury, the OECD notes that just one quarter of Europeans are satisfied with their work-life balance. That does make one suspect that Europeans are whiny little brats with too much time on their hands, particularly as the least happy countries included those that have it best, like Norway and Sweden. A surprising 12% of Greeks, meanwhile, thought they were spending far too much time with their families.

Nor is it clear that there is a direct correlation between longer working hours and better health outcomes. The Japanese work longer hours and seem to live longer lives, for example. Common sense dictates that satisfaction is strongly dependent on cultural attitudes to work (in developing economies people appear to be happier to be in work), the nature of work and the work place, and expectations outside of the workplace. How we use our free time dictates how much we value it. Social claims also don't bear much scrutiny - given more time, how many of us would use it to care for elderly relatives or choose to spend it on family? And how does expanding the workforce by reducing working hours reduce emissions?

Nevertheless, it is clear that many of our assumptions about work-life balance are outmoded. Families are smaller, both parents work and grandparents don't seem to be as enthusiastic about raising their children's children as they used to be. So, the rigid constraints of an eight hour day, five day week seems ill-suited to the needs of most employees with families who would probably prefer to be able to divide their working week up differently to better share the load. Those of us who have night horrors at the thought of raising children, meanwhile, might prefer to compress their working week to free up more leisure time rather than reduce the number of hours worked.

If the current trend continues and we all end up living longer lives with considerably longer careers, then we will need to look more closely at how we manage the hours we spend in work to ensure that we remain sane and get the possible social and health outcomes without compromising productivity or individual utility. So, how do we achieve that? Should we work less but smarter? Would spending fewer hours in the office really cost anything in terms of productivity? How can we deliver greater flexibility in the workplace? And, would we really use any extra free time wisely, or would we all just sit on the couch watching TV and eating pizza? Has all the free time we've won actually been a boon or is it just lost to us?

Category: Funding longer lives: Longevity risk, Pension/retirement, Social contract


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