Holidays and the economic growth of nations

MPRA Paper from University Library of Munich, Germany

Abstract: There is sufficient microeconomic evidence that holidays are important to economic life. Is there similar support at the macroeconomic level? This exploratory paper uses a simple approach to assess the impacts of holidays on the economic growth rates of 182 nations in 2002. It finds that the human development level has a larger effect on economic growth rate than holidays. At the aggregate level holidays affect economic growth positively, but in a statistically insignificant way. For example, increasing by one day the number of holidays per year adds 0.30% to annual growth rate. Unlike non-religious holidays, religious holidays, whether Christian or non-Christian, affect economic growth negatively. The results are meaningful, yet statistically weak insofar as their explanatory power is only around 20%. They suggest that instruments for holidays, such as total sales revenue during holidays ,or something, other than the number of holidays, may be better explanatory variables. One can think of any number of fixes like remodeling the problem, choosing alternative estimators and/or functional forms. For now, those fixes belong to future efforts.

Keywords: Holidays; economic growth; Madonna; human development index (HDI) (search for similar items in EconPapers)
JEL-codes: C21 C51 D60 E13 O47 (search for similar items in EconPapers)
Date: 2009-09-12
New Economics Papers: this item is included in nep-fdg and nep-tur
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:17326

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