Why the country with the least work in Europe is by far one of the richest: the key is not more but better

The relationship between working hours and income seems direct and linear. Anyone asked whether working more hours generates greater production and greater profit (whether for the employer, the employee, or both) will tend to answer yes. However, economic theory and reality demonstrate that this relationship is not as it seems, as another factor has a much greater influence. Proof of this is European countries, their weekly working hours , and their per capita income. Precisely the country with the fewest weekly hours per person in all of Europe is one of the economies with the highest per capita income (in the eurozone, it is only behind the curious case of Ireland). The key lies in high productivity per hour worked and a very high employment rate (they work few hours, but they do almost everything).

A few weeks ago, the statistical agency Eurostat published a striking map showing the number of working hours by country. Although correlation does not always imply causation, the truth is that countries with the longest working hours per week tend to be those at the bottom of the per capita income ladder (with some exceptions), and vice versa. The best example is the Netherlands , where weekly working hours barely exceed 32, four hours less than in Spain, for example. Despite the fact that people work far fewer hours in the Netherlands, the Dutch GDP per capita in purchasing power parity is the second highest in the entire eurozone, behind only Ireland (whose national accounting system has some problems producing data that reflects reality).

The big difference between the Netherlands and Spain (and many other economies where people work longer hours per week) lies in the high hourly output of the Dutch and the economy's ability to extend employment to every corner of the country . According to the latest data published by the OECD (corresponding to 2024), the Dutch manage to produce the equivalent of just over $82 per hour of work in purchasing power parity, practically the same level as Americans. Meanwhile, Spaniards produce around $60 per hour worked. This shows that often the key isn't more, but better.

As the OECD itself explains, GDP per hour worked is a measure of labor productivity that evaluates how efficiently the labor factor (employees) is combined with the other factors of production ( capital, technology, and land ) used in the process. To do this, GDP is divided by all hours worked in the country. The relationship between production or GDP and working hours depends largely on the machinery used, worker training, intermediate inputs, technical, organizational, and efficiency advances, and economies of scale.

In other words, linking productivity with effort and work time makes no sense. A Dutch employee can work four hours lying down in his office and produce much more than a Spaniard sweating profusely for 10 hours of intense work without a break. Unfortunately, productivity often depends very little on the willingness and effort of the labor force (the employee) and a lot on the capital (machinery, technology) at his disposal and the qualifications of the worker himself.

This exceptional performance is explained by structural factors: a small but highly developed economy integrated into global value chains , an innovative business environment with high technological adoption, and a highly skilled workforce, as revealed by an IMF report. Furthermore, the country has strong institutions and first-class infrastructure (ports, transport, digital networks) that foster efficiency. Historically, the Netherlands has maintained relatively low unit labor costs compared to the eurozone average, reflecting its high productivity and contributing to its competitiveness. Key sectors and contribution to competitiveness. The Dutch productive advantage is evident in several specialized sectors of its economy.

In high-tech agriculture , the Netherlands has become the world's second-largest exporter of agri-food products thanks to innovations such as automated greenhouses, advanced genetics, and robotics. The logistics sector is another pillar: the Port of Rotterdam is the busiest in Europe (and among the top 11 worldwide in terms of volume), and, together with Schiphol Airport, positions the country as a global trade hub , reducing costs and transportation times for companies. In manufacturing, the Netherlands excels in high-value, cutting-edge technology niches (machinery, electronics, chemicals); for example, ASML, the country's flagship company, dominates more than 90% of the global market for semiconductor lithography equipment, illustrating the enormous productivity of its technology sector.

Finally, financial services centered in Amsterdam (also the Rotterdam shipping hub) provide competitiveness through a powerful international banking and asset management sector, facilitating the financing of the economy. Together, these highly productive and specialized sectors underpin the Netherlands' overall competitiveness and explain its exceptional average productivity level. However, productivity growth has stagnated in recent years (hourly productivity fell by 0.2% in 2024, after declining by 1.3% in 2023), highlighting a challenge to reinvigorate efficiency gains without losing their high absolute level.

Not only that. The Netherlands maintains high productivity while also having one of the highest employment rates in all of Europe . This means that almost everyone of the working-age population has a job, even if it's just for a few hours. The country's employment rate is 83.5%, the highest in the EU and light years ahead of Spain's, which is 71.4%, for example.

Beyond the well-functioning Dutch labor market, one of the key factors is the high level of voluntary part-time employment. That is, people who voluntarily work less than 35 hours per week. Voluntary part-time employment is key when compared to other countries where part-time work is almost entirely involuntary. These are people who would like to work full-time (to earn a higher salary) but cannot. In the case of the Netherlands, 39% of all employment is part-time . Of all part-time employment, only 1.9% is involuntary. In the case of Spain, for example, part-time employment accounts for 13% of all employment (less than in the Netherlands), but 49% of all such employment is involuntary.

All in all, the Netherlands' per capita income is the highest in the entire eurozone, behind only the extraordinary case of Ireland. The Dutch GDP per capita is €63,030 , an income that is €11,000 higher than that of Austrians and €13,000 higher than that of Germans... and almost double that of Spain. This demonstrates or proves that working few hours or part-time is not per se negative for the economy, despite logic that seems to suggest otherwise.