Adam Smith Institute

The New York Times has reported that vacation time is good for your health. While this is not a very shocking or interesting revelation, it is certainly a useful piece of information that businesses and individuals could consider when creating employment contracts. More information can only help people make good decisions and properly weigh trade-offs. The problem, however, is that the researchers behind the study do not stop simply at spreading their information; they have fallen into the all-too familiar pattern of identifying something that has one good effect, and concluding that the appropriate action is to legislatively mandate that thing for everyone, regardless of the trade-offs. Most of Europe has already fallen into this trap, but America so far has held out.

Long vacations are a delightful thing, and may well be good for the health, but those aren’t the only concerns that either individuals or businesses must consider. After all, working in an office at all is probably less healthy than a life spent relaxing and exercising on the beach. The authors acknowledge that mandating increased vacation days would increase labour costs, but suggest that this would be counter-balanced by increased productivity and better employee retention. If this is really true, concerned organizations should be able to focus on simply spreading that information. This is precisely the sort of question that a market is suited to determine, for surely if these benefits really do make up for the increased costs, companies will begin offering longer vacation times. If businesses remain reluctant and people are unwilling to voluntarily make the trade-off between money and vacation time, perhaps European governments, too, should pay attention. 

People weigh the relative benefits of different packages of pay and hours and vacation days, and make their own decisions; for some, the extra pay may be well worth giving up the mild benefits of extra vacation time. If anything, perhaps proponents of longer vacations should be encouraging employers to offer more negotiable contracts, or encourage individuals to negotiate longer vacations in exchange for lower salaries, in line with how they value such things. Allowing a bunch of legislators to make that decision for Americans would be a step in the wrong direction.

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