“A four-day work week, a six-hour workday, why couldn’t that be the next step? Is eight hours the final truth? I think people deserve more time with their families, hobbies, life. This could be the next step for us in working life.” As was suggested by the 34-year old Finnish prime minister Sanna Marin in a meeting last summer before she was elected as the head of government. However, the official government twitter-account felt the need to highlight the fact that this is really not planned by the Finnish government. Just an example of developments that other European countries, such as Belgium, Germany, and the UK are also struggling with: discussion about shorter working weeks and more free time. Usually, such plans are conceived as being impossible. Should they materialise, they will have a huge impact on these countries’ labour market and economy.

I can already hear the reactions of my fellow economists: “Not a smart idea! We should be stimulating a bigger supply of labour, because in the long run – and by definition - that will lead to increased economic growth.”

It won’t surprise you that I take a slightly different view. Is aiming for a larger reservoir of labour not the dumbest thing we can do in countries with already stretched labour markets?

Economists’ wisdom: more is good

Working more, per person or with more people, contributes to economic growth, and our prosperity depends on that growth. The increased labour participation in many European countries of women since the end of World War II, for instance, has not only led to more economic independence for women, but also to higher economic growth. And the increased labour migration of mainly Eastern European employees since the start of this century has contributed to filling the gaps in our labour market, and therefore also to increased growth.

Hans Stegeman, Head of Research and Investment Strategy

Fewer part-timers, working more hours

The economic growth of recent decades is primarily the result of the increase in labour supply. The other route towards more prosperity, especially per capita, namely the rise in labour productivity, is one that is significantly more difficult.

And of course, increasing productivity growth is exactly what policy makers often present as to solution to stimulate growth. However, the fact is that labour productivity growth has actually been in decline these recent years in most western countries. Hence the alternative remedy: fewer part-timers, working more hours. More people, because the tight labour market is becoming a bottleneck for economic growth. To keep our prosperity at the required level, we need to work longer and harder.

But is that really true?

Taking care of loved ones, reading a good book, enjoying nature - is that not the best form of prosperity?

Less is better

Working more or working less, is also a social choice. If, for example, the Netherlands were number one in part timing because our institutions are responsible for people – often women – not being able to work full time, then we would need to change this. However, if people intentionally opt for a part-time job, then that might actually result in more prosperity.

For most people, social relationships are far more important than work or material prosperity. That is why part-time work and more spare time are at the top of the list for many, both men and women. Keynes already predicted this in 1930, in his letter to his grandchildren. He believed that in 100 years’ time we would be rich enough to be able to work much less – he was thinking 15 hours per week – if we wanted to.

Limits to growth

And there are two more arguments why less might be better. In the Netherlands, we are finding ourselves hemmed in by natural boundaries on all sides: nitrogen, greenhouse gasses, but also traffic-jams and overcrowded trains. More economic activity – more people – will only exacerbate the situation.

Furthermore: the call for increasingly more people to join the labour force will decrease the urgency to work smarter. It is, especially in the short run, easier to have more people working in the same way, than to find solutions to work smarter and hence increase productivity.

So, from this perspective, it is in the interest countries that the supply of labour should decrease. This would force us to think more creatively, for example about how to increase productivity per employee. And maybe, maybe, also ask ourselves the question if we need all these extra production.

Economists’ wisdom has been superseded

So, mirror, mirror on the wall, who is the dumbest of them all? Those who call for fewer working hours and less employees, or those who argue for a larger supply of labour? I understand the economists’ wisdom, but it may really have been superseded.

Time for taking care of loved ones, for instance. Or a good book. Enjoying any nature that we have left. Isn’t that the very best form of prosperity? And the young Prime minister of Finland understands. Will she dare go against economists’ wisdom?