Scrapping public holidays is in vogue. In July, French Prime Minister Francois Bayrou proposed eliminating Easter Monday and Victory in Europe Day (May 8) from France’s annual list of 11 public holidays. Outrage ensued, with political leaders from across the spectrum attacking the plan.
Bayrou said the move would help France ease budgetary pressures. He is not the only one to have come up with such a proposal.
Earlier this year, Slovakia cut one of its public holidays in an effort to improve its fiscal position, mirroring a move made by Denmark in 2023, when it removed a post-Easter holiday. Copenhagen’s reasoning was that it needed to create fiscal space to meet rising defence budgets.
Across the Atlantic, US President Donald Trump has gotten in on the act. On June 19, he wrote on his personal social media website that “too many non-working holidays in America” were costing “billions of dollars.”
Many interpreted the comments as a political statement because he made them on ‘Juneteenth’, a day that commemorates the end of slavery and which was made into a public holiday by the Biden administration.
But is there sufficient evidence to suggest that countries with fewer public holidays are more economically productive?
Mixed evidence
“Evidence to support this idea is limited,” Charles Cornes, senior economist with UK economic consultancy Cebr, told DW. “Productivity is driven less by the number of public holidays and more by factors such as labour efficiency, capital investment, workforce skills, and technology.”
Studies suggest very minor increases in gross domestic product (GDP) are possible as a result of cutting holidays.
A 2021 study by researchers Lucas Rosso and Rodrigo Andres Wagner found that public holidays may actually increase demand for some subcategories of GDP, but also that when public holidays fall on weekends and are not replaced, there is a small increase in GDP.
However, studies by the International Monetary Fund (IMF) and Germany’s Bundesbank found that any increase in GDP would be proportionally much smaller than the increase in total working days.
In theory, a day off work for a worker means that worker’s productivity is zero for that day. There is also the argument that worker productivity slows in the days around public holidays as well, as many people take these off these to maximize their time off.
While cutting a public holiday may lead to increased tax revenues for a government, there are counter-arguments that days off increase worker well-being in the longer term, which may also impact productivity.
“There is evidence to suggest that without more vacations and holidays, workers are at a higher risk of burnout, and this could lead to a decline in worker well-being more holistically,” Adewale Maye, a policy and research analyst with the Economic Policy Institute in Washington, told DW.
Public holidays and paid vacation time
The debate on public holidays is part of a wider discussion on working hours overall. Germany, the UK and the Netherlands are among the countries trying to tackle sluggish economic growth by reversing recent drops in average working hours.
However, scrapping public holidays is a separate idea from encouraging more labor force participation — for example, by encouraging those who work part-time to work longer hours, as Germany is doing.
That typically provokes a far less intense reaction than the idea of getting rid of national holidays altogether.
When public holidays and statutory paid vacation days are added together, most countries in the OECD have between 30 and 36 paid days off for workers annually, according to a 2020 study.
The US as an outlier
Some of the countries with the most combined days, such as Austria (38), Denmark (36) and Finland (36) also have among the highest GDP per capita in the world.
The US is the only OECD country that does not have any statutory leave. It has 11 public holidays, but according to Adewale Maye, many industries such as retail, tourism and transportation still operate during public holidays as workers are not guaranteed paid days off.
He points to all the other OECD countries that provide statutory vacation days without damaging their economies. “These economies have done well for themselves while also allowing workers the right to rest,” he said.
He says that is one of the central arguments against President Trump’s hypothesis that the US has too many “non-working holidays.”
“Working more has never been the issue in the United States,” he said. “Building an economy where all workers and their families can feel supported, secure, and can thrive is.”
Worker productivity factors
Charles Cornes says it could be true, given the size of the US, that asking businesses to close for the day could have a materially negative economic impact. However, he says each sector is different.
“Hospitality and retail, in particular, often see an uplift in activity, providing much-needed support to traditional brick-and-mortar retailers that have faced sustained pressure from the growth of e-commerce over the past decade,” he said.
He emphasizes that worker productivity ultimately comes down to other factors and is not simply a case of hours worked.
“For example, if Germans were working fewer hours but producing the same level of output within these reduced hours, this would not damage the economy and could instead be beneficial both socially and economically if people had more free time to spend on experiences.”
Edited by: Ashutosh Pandey
