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September 05, 2016

How much do we work?

Today is Labor Day in the US, a holiday initially scheduled in contradistinction to what was viewed as the socialist labor holiday of May 1. It is a good time for asking how much we really work, since large numbers of people feel that their pay for effort has decreased. In July my household was randomly selected for the monthly US survey that produces the official data on unemployment and employment, and on work time—our best measure of effort. Each American adult has only a 5% chance of being in this survey over his/her lifetime, so this was a real thrill for me. It was easy to answer the questions that indicated whether my wife and I are employed, unemployed, or out of the labor force. Although opportunistic politicians, including one current US presidential candidate, snipe at them, unemployment statistics are among the most accurately produced and carefully measured in the US and other rich countries, as my easy response suggests.

The same is not true of questions designed to elicit how many hours I worked during the previous week—my work effort. I answered 40 hours, but I really have no good idea about how many it was. And I don’t think I’m unusual: In the 1930s and 1940s when the basic structure of these surveys was designed, most workers punched a clock or kept regular retail jobs. It was simple for them to answer accurately a question about their work hours. With increasing percentages of employees in jobs that involve creating things—“brain-work”—it is extremely difficult to separate work from leisure. For example, I get some of my best ideas while running long-distance; so, is the time I spend running work time? Yes and no. Indeed, what constitutes work for many of us?

Does this mean that our measures of work hours are on average inaccurate—that we don’t know how many hours Americans and others work per week and that Americans do not actually work more hours per week and per year than in other countries, as OECD statistics suggest? Perhaps, perhaps not; but it surely means that current reports of hours worked per week should be taken with numerous spoonsful of salt.

We could get better information by relying on samples of people keeping time diaries, as is now done in the US by about 1,000 people each month. A diary, which indicates exactly what the person did at each moment of the previous day, reduces biases and errors in responses to existing questions about hours worked per week. The evidence shows that these errors are substantial—data from diaries differ greatly from reported work hours for many people; and the errors vary as the labor market tightens, and they differ systematically by demographic group.

Collecting enough diaries each month to be statistically meaningful would be expensive; but without them, I doubt that we are getting good measures of the amount of time that those with jobs are actually working. Without those measures, it is difficult to say how average pay per effort is changing and whose pay per effort is rising or falling. We need to do better.

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We recognize that IZA World of Labor articles may prompt discussion and possibly controversy. Opinion pieces, such as the one above, capture ideas and debates concisely, and anchor them with real-world examples. Opinions stated here do not necessarily reflect those of the IZA.