In his essay “Economic Possibilities for our Grandchildren”, John Maynard Keynes theorised that the natural course of economic development is for wealthier economies to work less. But Europe, where economic growth has stagnated and demographic outlooks are dour, has taken this message too quickly to heart.

According to the European Central Bank, Euro area residents work substantially fewer hours on average than US workers, and have recorded a larger post-Covid drop than their American counterparts. This adds to the list of economic shortcomings relative to the US that are alarming Europe’s policymakers. Germany — which has one of the lowest average working hours in the EU — has been debating measures that would incentivise more working hours, and other nations should look to make similar changes.

IMF research found that there is a gap across Europe between the hours that people desire to work and the hours they actually do, resulting in a 2 per cent reduction in hours worked across the continent. The gap primarily stems from part-time workers and women, and is often due to tax policies that are meant to encourage flexibility, but inadvertently stymie labour uptake.