Who wants to work more? Revisiting the decline in average hours worked

Prepared by Clémence Berson and Marco Weissler

Published as part of the ECB Economic Bulletin, Issue 3/2025.

In most euro area countries, average hours worked (AHW) per employee have been falling since 2020 and remain below their pre-pandemic levels. The decline was particularly strong in 2020 owing to policy measures to reduce the spread of COVID-19.^[1] National accounts data show that, in the fourth quarter of 2024, AHW were still 1.8% lower than a decade before (Chart A) despite the proportion of part-time workers remaining broadly stable over the same period. This decline has been accompanied by rising employment. Over the past decade, employment across the euro area has grown by 13.1% – approximately 19.9 million people. Therefore, total hours worked increased despite the decrease in AHW per employee. In this box, we use data from the European Union Labour Force Survey (LFS) to assess the extent to which the fall in AHW was driven by workers working zero hours (e.g. because of holiday or sick leave) or long hours (e.g. because of overtime) during the reference week.^[2]

Labour supply and labour demand factors have both played a role in the decline of AHW. The economic cycle has a direct impact on hours worked. Before laying off employees, firms first use the intensive labour margin and reduce the number of hours worked by employees. Consequently, lower labour demand can lead to labour hoarding, whereby firms decide to retain their workforce even when the workforce is not working at full capacity, considering the demand drop to be transitory and firing and re-hiring to be too costly.^[3] On the other hand, lower labour supply can reduce AHW, for example owing to changing working preferences or higher levels of sick leave and parental leave.^[4] If these effects are particularly pronounced for certain demographics (e.g. younger or older employees) or in certain sectors of the economy, compositional effects could have an impact on AHW.

The decline in AHW has largely been driven by the reduced proportion of employees working long hours and the higher proportion working zero hours during the reference week.^[5] Detailed data from the LFS up to 2023 confirm the decline in AHW (Chart B), while also highlighting significant differences across countries. Overall, in 2023 AHW (as measured by the LFS) remained 0.6 hours per week, or 1.8%, below their 2014 level. This gap is mainly attributable to a decline in the proportion of employees working long hours (defined as more than 49 hours per week) – from 6.5% to 3.7% of all employees. Although these employees represent only a small proportion of the total workforce, the sharp reduction in their working time has affected the euro area average.^[6] Moreover, employees working zero hours had a large impact on AHW during the pandemic. While in 2022 around one-third of the decline in AHW was due to employees working zero hours, their contribution was broadly neutral in 2023, in line with the reduced rate of employees taking sick leave. If we exclude employees working long or zero hours, AHW were 0.1 hours higher in 2023 than in 2014, having remained broadly stable over that period.^[7]

The proportion of employees working zero hours has mostly subsided from its pandemic peak. The proportion of employees who did not work during the reference week partially returned to its pre-pandemic level following the peak observed during the pandemic (Chart C). However, it remained elevated, mainly in Spain and France (4 and 1 percentage points higher respectively in 2023 than in 2014). Both countries saw changes in labour regulation, facilitating the entry of marginal employees through permanent seasonal contracts in Spain and apprenticeships in France. These employees more frequently work irregular hours (e.g. during the off-season or training periods) and therefore have more zero-hour working weeks. As previously mentioned, the proportion of employees working zero hours is also still being affected by slightly elevated rates of sick leave and parental leave.

The proportion of people working long hours has continued its declining trend from before the pandemic and has recently fallen faster than the proportion preferring to work long hours. While some employees still aim to work significantly more hours than they actually work (e.g. part-time employees), the proportion of employees who prefer to work long hours is declining (Chart D).⁴ This trend is largely consistent across euro area countries and also among self-employed workers. While around 29% of self-employed people are working long hours, less than 4% of employees do so.^[8] Over the last decade these proportions have declined by 7 and 2 percentage points respectively. Preferences for working long hours have been falling broadly in line with actual long hours worked. This suggests that the fall in long hours worked is at least partly supply-driven and is likely persistent. However, the decline in this proportion after the pandemic was slightly stronger than that in the proportion of workers who prefer to work long hours. This suggests that the fall in AHW has not been entirely driven by reduced preferences for working long hours but may also have been partially affected by low labour demand, which might recover cyclically.

Relative to 2014, employees working long hours are more often working in the public sector and are less often university-educated than employees working non-long hours. The largest compositional shift was driven by the increase in the rate of high-income earners among employees working long hours. While 59% of all employees working long hours in 2014 were in the top three income deciles, this proportion increased to 68% in 2023 (Chart E). At the same time, a greater proportion of employees with high AHW are working in the public sector than a decade ago, while a smaller proportion are working in the trade and industry sectors. In addition, the proportion of university-educated employees increased among employees working long hours, but to a lesser extent than for the overall economy.