posts: 37874

{
    "id": "wp-37874",
    "slug": "rich-poor-working-hours",
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                        "text": "Our World in Data presents the data and research to make progress against the world\u2019s largest problems.",
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                        "text": "This blog post draws on data and research discussed in our entries on ",
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                                "url": "https://ourworldindata.org/working-hours",
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                                        "text": "Working Hours",
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                        "text": " and ",
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                                "url": "https://ourworldindata.org/time-use",
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                                        "text": "Time Use",
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                                "text": "Workers in richer countries tend to work\u00a0fewer hours\u00a0than those in poorer countries. This is because in richer countries workers are able to produce more with each hour of work, which translates into higher incomes and the ability to work less. The large differences in working hours across countries have important implications for the way we think about the economic progress made in the last two centuries and the nature of inequality between countries today.",
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                "type": "callout",
                "title": "Summary",
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                        "text": "Economic prosperity in different places across our world today is ",
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                        "url": "https://ourworldindata.org/global-economic-inequality",
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                                "text": "vastly unequal",
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                        "text": ". People in Switzerland, one of the richest countries in the world, have an average income that is more than ",
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                    },
                    {
                        "children": [
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                                "text": "20-times higher",
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                        "text": " than that of people in Cambodia.{ref}We chose Cambodia and Switzerland here because they both also have working hours data available, but the difference in average income can be even more extreme. For instance, people in Qatar have an ",
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                    },
                    {
                        "url": "https://ourworldindata.org/grapher/real-gdp-per-capita-pennwt?tab=chart&country=CAF~KHM~CHE~QAT",
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                            {
                                "text": "average income that is ",
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                            {
                                "children": [
                                    {
                                        "text": "1",
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                        "url": "https://ourworldindata.org/grapher/real-gdp-per-capita-pennwt?tab=chart&country=CAF~KHM~CHE~QAT",
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                                "children": [
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                                        "text": "1",
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                        "url": "https://ourworldindata.org/grapher/real-gdp-per-capita-pennwt?tab=chart&country=CAF~KHM~CHE~QAT",
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                                "children": [
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                                        "text": "7",
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                        "url": "https://ourworldindata.org/grapher/real-gdp-per-capita-pennwt?tab=chart&country=CAF~KHM~CHE~QAT",
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                                "children": [
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                                        "text": "-times higher",
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                        "text": " than that of people in the Central African Republic.",
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                        "text": "These differences refer to GDP per capita measured in international-$ and account for price differences between countries to enable comparisons. You can read more about this ",
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                    },
                    {
                        "url": "https://ourworldindata.org/what-are-ppps",
                        "children": [
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                                "text": "here",
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                        "text": ".{/ref} Life in these two countries can ",
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                    },
                    {
                        "url": "https://www.gapminder.org/dollar-street/?max=2755&countries=kh%2Cch&media=image&min=59&topic=homes&zoom=3",
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                                "text": "look starkly different",
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                        "text": ".{ref}But life can also look similar, as you see in the pictures of the ",
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                        "url": "https://www.gapminder.org/dollar-street/?max=2754&countries=kh%2Cch&media=image&min=1357&topic=homes&zoom=3",
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                                "text": "homes",
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                        "text": ", ",
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                        "url": "https://www.gapminder.org/dollar-street/?max=2754&countries=kh%2Cch&media=image&min=1357&topic=computers&zoom=3",
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                                "text": "computers",
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                        "text": ", and ",
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                        "url": "https://www.gapminder.org/dollar-street/?max=2754&countries=kh%2Cch&media=image&min=1357&topic=phones&zoom=3",
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                                "text": "phones",
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                        "text": " of people on similar income levels in the two countries.{/ref}",
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                        "text": "When considering such differences in prosperity, a natural question is: who works more, people in richer countries like Switzerland or in poorer ones like Cambodia?",
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                        "text": "Looking at the available data, the answer is clear: workers in poorer countries actually tend to work more, and sometimes ",
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                        "children": [
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                                "text": "much",
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                        "text": " more.",
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                        "text": "We see that in the chart here, with GDP per capita on the horizontal axis and annual working hours per worker on the vertical axis.\u00a0",
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                        "text": "Countries like Cambodia (which is the country in the very top-left corner) or Myanmar have some of the lowest GDP per capita but highest working hours. In Cambodia the average worker puts in 2,456 hours each year, nearly 900 more hours than in Switzerland (1,590 hours) at the\u00a0bottom-right of the chart. The extra 900 hours for Cambodian workers means longer work days and many fewer days off.",
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                "url": "https://ourworldindata.org/grapher/annual-working-hours-vs-gdp-per-capita-pwt?tab=chart&stackMode=absolute&time=2019..latest&country=&region=World",
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                "text": [
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                        "text": "Working hours tend to decrease as countries become richer",
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                        "text": "There is a link between national income and average working hours, not only across countries at a given point in time \u2014 as shown in the chart above \u2014 but also for individual countries ",
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                        "children": [
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                                "text": "over time.",
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                        "text": "Since the Industrial Revolution people in many countries have ",
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                        "url": "https://ourworldindata.org/breaking-the-malthusian-trap",
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                                "text": "become richer",
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                        "text": ", and ",
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                        "url": "https://ourworldindata.org/working-more-than-ever",
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                                "text": "working hours have decreased dramatically",
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                        "text": " over these last 150 years.",
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                        "text": "In the chart here we show this association between incomes and working hours over time, country by country. It is the same chart as above, except now countries\u2019 single data points have become lines, connecting observations over time from 1950 until today.",
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                        "text": "The four highlighted countries exemplify how working hours have decreased at the same time that average incomes have increased. Germany, for example, moved far to the right as its GDP per capita increased more than 10-fold (from $5,227 to $51,191), and far to the bottom as working hours decreased by nearly half (from 2,428 hours to 1,386 hours each year).{ref}These trends in GDP per capita are measured in constant international-$ and account for inflation to enable comparisons over time and between countries. You can read more about this ",
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                        "url": "https://ourworldindata.org/economic-growth",
                        "children": [
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                                "text": "here",
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                        "text": ".{/ref}",
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                        "text": "This makes sense: as people's incomes rise they can afford more of the things they enjoy, including more leisure and less time spent working.",
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                        "text": "You can explore this association for other countries by clicking \u201cSelect countries\u201d on the chart.",
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                "url": "https://ourworldindata.org/grapher/annual-working-hours-vs-gdp-per-capita?tab=chart&xScale=log&stackMode=absolute&time=1950..latest&country=BRA~USA~DEU~TWN&region=World",
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                        "text": "People are able to work less when they work in more productive economies",
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                        "text": "The key driver of rising national incomes and decreasing working hours is productivity growth.",
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                        "text": "Productivity refers to the rate at which inputs are turned into outputs. To understand working hours the key metric is ",
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                                "text": "labor",
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                        "text": " productivity: the economic return for one hour of work.",
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                        "text": "At the most concrete level, labor productivity captures things like the number of breads that a baker bakes in an hour, or the number of cars factory workers assemble in an hour. At the most comprehensive level, it relates the total output of the economy (GDP) to the total labor input (total annual hours worked), giving us the aggregate measure of labor productivity, GDP per hour of work.",
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                        "text": "Higher labor productivity is associated with fewer working hours, as shown in the chart here with labor productivity on the horizontal axis and annual working hours on the vertical axis. The chart currently shows data for the latest available year, but you can explore this relationship over time since 1950 by using the blue time slider at the bottom of the chart.",
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                        "text": "We see that the same richer countries with lower working hours we noted before \u2014 like Germany and Switzerland \u2014 have very high labor productivity (69 and 83 $/h, respectively). If workers can produce more with each hour of work, it becomes possible for them to work less.",
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                        "text": "Though this doesn\u2019t necessarily mean they ",
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                        "children": [
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                                "text": "actually do",
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                        "text": " work less \u2014 workers in the US and Singapore, for instance, work many more hours than their counterparts in countries with similar productivity.{ref}We explore the differences in working hours between similar, highly productive countries \u2014 and also the differences within those countries \u2014 in forthcoming posts.{/ref}",
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                        "text": "In contrast, the countries toward the top-left of this chart have far lower labor productivity \u2014 Cambodia, for example, is at only 3$/h \u2014 and thus workers there need to work many more hours to compensate.",
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                "text": [
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                        "text": "At the heart of the link between productivity, incomes, and working hours is technological innovation",
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                        "text": "Technological innovation \u2014 defined broadly here to include physical machines as well as ideas, knowledge, and processes \u2014 makes it possible for each worker to become much more productive. And increases in productivity in turn help drive both increases in incomes and decreases in working hours.{ref}For a discussion of how technology drives productivity growth and a rise in incomes (economic growth), see Romer, P. (1990) ",
                        "spanType": "span-simple-text"
                    },
                    {
                        "url": "https://www.journals.uchicago.edu/doi/abs/10.1086/261725",
                        "children": [
                            {
                                "text": "Endogenous Technological Change.",
                                "spanType": "span-simple-text"
                            }
                        ],
                        "spanType": "span-link"
                    },
                    {
                        "children": [
                            {
                                "text": "Journal of Political Economy.",
                                "spanType": "span-simple-text"
                            }
                        ],
                        "spanType": "span-italic"
                    },
                    {
                        "text": " For a discussion of the relationship between productivity growth, economic growth, and working hours, see Boppart, T. and P. Krusell (2020) ",
                        "spanType": "span-simple-text"
                    },
                    {
                        "url": "https://www.journals.uchicago.edu/doi/full/10.1086/704071?casa_token=gHAZpu6iXwkAAAAA:WUwiHwVFoOWNFdnfKenDUm9yOtgcjKxwZpohoDcmZk8ZMwMASp86fPHmmd3-r8NLJk-9UKorX7o",
                        "children": [
                            {
                                "text": "Labor Supply in the Past, Present, and Future: A Balanced-Growth Perspective",
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                            }
                        ],
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                    {
                        "text": ". ",
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                        "children": [
                            {
                                "text": "Journal of Political Economy.",
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                        "text": "{/ref}",
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                        "text": "A prime example of how tech innovation drives productivity growth is agriculture. As we show in detail in ",
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                    {
                        "url": "https://ourworldindata.org/crop-yields",
                        "children": [
                            {
                                "text": "our entry on Crop Yields",
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                        ],
                        "spanType": "span-link"
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                        "text": ", innovations like better machinery, crop varieties, fertilizers, and land management have enabled farmers to be ",
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                    {
                        "children": [
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                                "text": "much more",
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                        "text": " productive. In the US, for example, farm production per labor hour increased nearly 16-fold from 1948\u20132011.{ref}See Figure 18 on p. 28 of Wang et al (2015) ",
                        "spanType": "span-simple-text"
                    },
                    {
                        "url": "https://www.ers.usda.gov/webdocs/publications/45387/53417_err189.pdf?v=6052.7",
                        "children": [
                            {
                                "text": "Agricultural Productivity Growth in the United States: Measurement, Trends, and Drivers",
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                            }
                        ],
                        "spanType": "span-link"
                    },
                    {
                        "text": ". ",
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                    {
                        "children": [
                            {
                                "text": "USDA Economic Research Report 189.",
                                "spanType": "span-simple-text"
                            }
                        ],
                        "spanType": "span-italic"
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                        "text": "{/ref} This increased productivity enables us to feed a ",
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                    },
                    {
                        "url": "https://ourworldindata.org/grapher/population?country=~OWID_WRL",
                        "children": [
                            {
                                "text": "rapidly growing population",
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                            }
                        ],
                        "spanType": "span-link"
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                    {
                        "text": ", even while the ",
                        "spanType": "span-simple-text"
                    },
                    {
                        "url": "https://ourworldindata.org/grapher/employment-by-economic-sector?stackMode=relative",
                        "children": [
                            {
                                "text": "fraction of people working in agriculture",
                                "spanType": "span-simple-text"
                            }
                        ],
                        "spanType": "span-link"
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                    {
                        "text": " is smaller than ever.{ref}The transition of employment out of agriculture to other economic sectors as countries become richer is known as \u2018structural transformation\u2019. You can read more about this in our post ",
                        "spanType": "span-simple-text"
                    },
                    {
                        "url": "https://ourworldindata.org/structural-transformation-and-deindustrialization-evidence-from-todays-rich-countries",
                        "children": [
                            {
                                "children": [
                                    {
                                        "text": "Structural transformation: how did today\u2019s rich countries become \u2018deindustrialized\u2019?",
                                        "spanType": "span-simple-text"
                                    }
                                ],
                                "spanType": "span-italic"
                            }
                        ],
                        "spanType": "span-link"
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                        "text": "{/ref}",
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                        "text": "The chart here shows the growth in labor productivity, not just for agriculture but for the entire economy. The technological, economic, and social structures in richer countries have enabled workers there to produce more while working less.",
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                "url": "https://ourworldindata.org/grapher/labor-productivity-per-hour-pennworldtable?tab=chart&time=1950..2017&country=AUS~BEL~BRA~KHM~CHL~CHN~DEU~IND~ZAF~KOR~TWN~GBR~USA~CHE&region=World",
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                        "text": "Besides tech innovation, there is evidence that working fewer hours can itself keep productivity higher, making the link between working hours and productivity self-reinforcing. For example, economist ",
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                    {
                        "url": "https://academic.oup.com/ej/article-abstract/125/589/2052/5078088?redirectedFrom=fulltext",
                        "children": [
                            {
                                "text": "John Pencavel (2015) studied",
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                        ],
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                        "text": " munitions workers in war-time Britain and found that their productivity stayed high up to a certain threshold of hours, but declined markedly above that threshold.{ref}Pencavel, J. (2015) ",
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                    {
                        "url": "https://academic.oup.com/ej/article-abstract/125/589/2052/5078088?redirectedFrom=fulltext",
                        "children": [
                            {
                                "text": "The productivity of working hours",
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                        "text": ". ",
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                        "children": [
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                                "text": "The Economic Journal.",
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                        "text": "{/ref} We\u2019ve probably all experienced the drop in productivity that comes at the end of a very long day of work.",
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                        "text": "What we learn from this",
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                        "text": "The data show that it is workers in poorer countries who tend to work more, and sometimes ",
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                                "text": "a lot",
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                        "text": " more, than those in richer countries.",
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                        "text": "This has large implications for the way we think about the economic progress made in the last two centuries and the nature of inequality between countries today.",
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                        "text": "It means that residents of today\u2019s poorer countries like Cambodia and Myanmar \u2014 and also of today\u2019s richer countries in the past when they were poor \u2014 are not just ",
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                        "children": [
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                                "text": "consumption",
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                        "text": " poor, often unable to afford necessities like food and medicine. It means they are also ",
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                                "text": "leisure",
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                        "text": " poor: because productivity is low and they must work so much just to scrape by, they can\u2019t afford to spend much time improving their condition, becoming educated, or simply enjoying leisure time.",
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                        "text": "That people in poorer countries work so much more than in richer countries shows that differences in prosperity are not due to differences in work ethic \u2014 they are largely due to differences in circumstance and opportunity. As we ask in ",
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                    },
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                        "url": "https://ourworldindata.org/talent-is-everywhere-opportunity-is-not",
                        "children": [
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                                "text": "another post",
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                        "text": ", \u201cwhat would have been the chances for Steve Jobs if he was born in the Central African Republic?\u201d No matter how hard he worked or how smart he was, it is difficult to imagine that Steve Jobs would\u2019ve been able to realize his potential with such a steep mountain of inequality to climb.",
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                        "text": "We also see what ",
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                                "text": "the world ",
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                        "url": "https://www.imf.org/en/Publications/WP/Issues/2018/12/07/Invisible-Geniuses-Could-the-Knowledge-Frontier-Advance-Faster-46383",
                        "children": [
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                                "text": "misses out on",
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                        "text": " when exceptionally talented people, including all the brilliant but underprivileged people in today\u2019s poorest countries, don\u2019t have the opportunity to realize their potential.{ref}Agarwal, R. and Gaule, P. (2020) ",
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                    },
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                        "url": "https://www.aeaweb.org/articles?id=10.1257/aeri.20190457&&from=f",
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                                "text": "Invisible Geniuses: Could the Knowledge Frontier Advance Faster?",
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                        "children": [
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                                "text": " American Economic Review: Insights.",
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                        "text": "{/ref}",
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                        "text": "Finding ways to raise productivity is therefore not just key to increasing production, but also to the reduction in working hours that is necessary for a society to flourish.",
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                        "children": [
                            {
                                "text": "Continue reading Our World in Data:",
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                    }
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            {
                "url": "https://ourworldindata.org/working-hours",
                "type": "prominent-link",
                "title": "How much time do people spend working?",
                "description": "In our entry on Working Hours, we present the data and explore how it differs across countries and over time, and how these differences matter for people's lives.",
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            {
                "url": "https://ourworldindata.org/time-use",
                "type": "prominent-link",
                "title": "How do people spend their time?",
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        ],
        "type": "article",
        "title": "Do workers in richer countries work longer hours?",
        "authors": [
            "Charlie Giattino",
            "Esteban Ortiz-Ospina"
        ],
        "excerpt": "Workers in richer countries tend to work fewer hours than those in poorer countries.",
        "dateline": "December 21, 2020",
        "subtitle": "Workers in richer countries tend to work fewer hours than those in poorer countries.",
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        "featured-image": "annual-working-hours-vs-gdp-per-capita-pwt.png"
    },
    "createdAt": "2020-11-30T20:10:06.000Z",
    "published": false,
    "updatedAt": "2022-03-21T17:42:33.000Z",
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    "publishedAt": "2020-12-21T11:00:00.000Z",
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