Do Germans and Spaniards have different preferences between work and leisure?

Roughly a quarter of the difference between Germany and Spain’s employment rates is the result of different preferences for working in the two countries. That is the central finding of research by Simone Moriconi and Giovanni Peri, presented at the annual congress of the European Economic Association in Geneva in August 2016.

What’s more, their study shows, there is a component in people’s preferences between labour and leisure that is rooted in national cultures. The trait is shared by workers from the same country of origin (the country of their parents’ birth) and is transmitted from one generation to the next.

Employment rates vary across Europe, shaped by both the local economy and by people’s own preferences for working instead of being unemployed. This study finds that when an economic crisis leads to people being unemployed for longer, as well as when wages fall and people tend to end up with less satisfying jobs, people’s passion for working falls too.

The researchers conclude that the ‘employment gap’ – which is determined by different work cultures – can only be reduced through institutional and welfare reforms that increase employment prospects permanently and enhance the attractions of a paid job.