The Industrious Greeks Mystery

In the course of the Greek crisis, animosities between creditor countries like Germany and Greece didn't take long to surface. They were fired up in the tabloid press, which was quick to revive various stereotypes. In Greece, Germans soon found themselves compared to their Nazi predecessors, while German tabloids inter alia complained sotto voce about those allegedly “lazy Southerners”.

The stereotype of “lazy Greeks”

This complaint seemed only natural, after all, everybody knows how hard-working Germany's citizens are compared to the siesta-prone indolent slackers inhabiting assorted Mediterranean shores, right? Not so fast, said economists. OECD studies show that the average Greek worker toils for 2,017 hours per year, the by far highest figure in Europe.

More stereotyping …

This compares to a seemingly ridiculous 1,408 hours put in by the average German worker per year, who finds himself almost at the very bottom of the OECD's list. Oops, there goes a well-worn stereotype. These figures have to be put in to perspective though. Superficially, it looks like the average Greek citizen in the labor force is working 40% more than his comparable German counterpart, but to some extent this is comparing apples to oranges.

OECD statistics on hours worked per year. This is a slightly dated statistic, but not much has changed since it has been compiled – click to enlarge.

For one thing, Greece's labor force has a fairly large number of self-employed people, who habitually work longer hours than salaried employees. For another, every fourth German worker is working part-time. However, even if one adjusts for these effects and only compares full-time employees, Greeks still work approx. 10% more than Germans on average (the latter take longer vacations, as well as more sick and maternity leave).

The standard explanation for why the Germans nevertheless have to bail out the Greeks and not vice versa is that the former are more productive, and this is undoubtedly the case. However, there is more to it than that. The answer was recently provided in an article by Justin Murray at Mises.org.

Dependency on the State

The problem, as Mr. Murray writes, is that there are far too many people in Greece who rely on the government for their income. In short, more wealth is distributed by the State than is actually produced. As Murray suggests: