The public holiday for King Charles III’s coronation will likely give us all a boost, regardless of whether you’re a royalist. Two economists explain why
The coronation of King Charles III has upped the UK’s public holiday count this year. Today’s special public holiday, combined with the early May bank holiday and the spring bank holiday at the end of May, has made for a month of celebrations for many workers.
Normally public holidays in the UK – and in England and Wales in particular – are much more rare occasions. The coronation celebration brings the total to nine in 2023, which is still fewer than any EU country. Given that hours worked in the UK over the whole year are 11 per cent higher than in Germany, for example, it is not clear that working more and having fewer holidays is a sign of economic success.
Currently, nine of the top ten most productive OECD countries, measured by GDP per hour worked in dollars, are in continental Europe. Yet this is a region with a tradition of long holidays. There is also evidence that national holidays have a small but positive impact on economic activity, or at least no ill-effect.
Having several three-day weekends in one month also brings into focus the recent four-day working week pilots (without loss of pay) in many countries. Iceland led one of the earliest large trials between 2015 and 2019, with its success seeing it rolled out to close to 90 per cent of Iceland’s workforce. These people can now request a shorter workweek without any loss in pay.
Findings from a New Zealand trial among employees of Unilever also showed strong results against standard business targets such as revenue growth. The vast majority of participants reported feeling engaged and absenteeism dropped by 34 per cent during the trial.
A similar six-month pilot programme took place in the UK from June to December 2022, involving 61 companies and around 2,900 workers. As with the other trials, organisers said it was a resounding success for the companies involved – 56 of these 61 businesses pledged to continue with the four-day week.
Paying 100 per cent of the standard wages for 80 per cent of the previous worktime may seem uneconomic, but the UK trial found that the “vast majority of companies were also satisfied that business performance and productivity were maintained”. Staff retention also improved with the number of people leaving the participating companies dropping by 57 per cent during the trial.
Wellbeing and health benefits
But the most significant benefits to employees from these four-day week trials have been in terms of wellbeing. The UK trial reported that 39 per cent of employees were less stressed and 71 per cent said they had reduced levels of burnout by the end. The average mental health score (on a five-point scale from poor to excellent) rose from 2.95 at the beginning of the trial to 3.32 by the end – an increase of 13 per cent. And in terms of anxiety, 54 per cent of respondents reported a reduction in negative emotions.
A similar wellbeing boost was seen in Ireland’s four-day work week trial completed in 2022. Among the 12 Irish companies involved, employees saw a reduction in anxiety and negative feelings and an increase in positive feelings (and expressions of those feelings) throughout the trial.
The previously-mentioned New Zealand trial also confirmed the strong positive effects of a four-day week on wellbeing. Over two-thirds of participants reported a better work–life balance, and measured stress levels dropped by 33 per cent during the trial period.
Four-day work week versus public holidays
But the benefits from four-day week trials are permanent since they accrue from a long-term change in working arrangements, at least during the trial. So, the effects of this year’s spate of May bank holidays in the UK could be different.
This was certainly shown to be the case by a study that looked at the wellbeing benefits of national holidays across 200 countries. It found that one less public holiday reduces the probability of being happy by 0.8 percentage points, but that one less public holiday had no impact on the longer-term measure of life satisfaction.
But other research shows that, although the positive wellbeing impact of public holidays may not be permanent, it does lead to an increase in social cohesion or social capital. This brings its own economic and wellbeing benefits. For all but a minority of the workforce, public holidays ensure that people are using it for leisure time. And social cohesion has long been associated with positive wellbeing.
We need to focus on workplace wellbeing more than ever. In addition to multiple high profile workplace bullying and harassment scandals recently, calls to employee assistance hotlines are at record highs due to anxiety and depression among employees. These initiatives were designed to meet demand for a range of work-related queries and advice, not to act as an emergency mental health service.
And so, the coronation public holiday may give UK workers the much-needed celebration they need. Whatever your view of the Royal family, May’s public holidays will benefit the economy, but more importantly, they will deliver a wellbeing boost for much of the country.
Tony Syme is senior lecturer in economics at the University of Salford, England; Maria Paola Rana is a lecturer in economics at the University of Salford.
This article is republished from The Conversation under a Creative Commons license. Read the original article.
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