There is renewed clamour for longer working hours in India. Business leaders such as Narayana Murthy and S N Subrahmanyan of Larsen & Toubro have argued that Indians must work more if the country is to grow faster. The debate has been noisy, and often moralistic.
Some argue that Indian workers are too poorly paid to be asked to work longer. Others point to the mental health cost, the strain on families, and the loss of leisure. The counter-argument is familiar: faster growth will raise incomes and living standards.
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Both sides miss the central economic question. What is the relationship between wages, working hours, and productivity? Do longer hours push workers into a high-productivity equilibrium, or trap them in a low-productivity one? The answer depends less on exhortation and more on incentives.
Working hours and productivity
Debates over working hours are not new. Workers in the United States, Russia, Germany, and Austria have fought for shorter hours. In China, many firms follow the 996 work culture: 9 am to 9 pm, six days a week. Some business leaders admire this model. Some Indian voices now appear to want a version of it.
The distinction that matters is between production and productivity. Longer hours may raise output. That is not the same as raising output per hour worked.
Research on part-time call centre workers in the Netherlands showed that longer hours increased total production. But it also showed that productivity fell. This is not a minor distinction. Higher income over time comes from productivity, not merely from keeping people at work for longer.
Cross-country patterns point in the same direction. Norway has relatively shorter working hours and high labour productivity. Bangladesh has longer average working hours and low productivity. This does not mean shorter hours automatically make a country rich. It means long hours are a weak substitute for better capital, better management, better skills, better technology, and better institutions.
India’s policy question is therefore not how to lengthen the workday. It is how to raise productivity.
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India must raise productivity, not hours
The literature identifies several drivers of productivity. These include managerial quality, labour skills, capital intensity, information technology, research and development, learning by doing, product innovation, firm structure, competition, regulation, productivity spillovers, and flexible input markets.
Longer working hours are not central to this list.
This should matter to both policymakers and business leaders. If firms want more output, they can extract more time from workers. If India wants higher incomes, it must raise productivity. The two are not the same.
There is also a wage question. Studies across countries show a negative relationship between salaries and working hours. One possible channel is productivity: fewer hours may be associated with better productivity, and better productivity with higher wages.
But this link is not automatic. Higher productivity need not raise wages. It may lower prices. It may raise profits. It may be captured by the owner of capital. The result depends on labour markets, bargaining power, competition, and the internal wage policies of firms.
This is why the long-hours debate cannot be settled by slogans about national effort.
Wages, costs and worker utility
A simple utility model helps clarify the issue.
The model has three assumptions. First, it is a short-run model, covering a day, a week, or a month. Second, wages mean total compensation, including non-monetary benefits. Third, wages are nominal.
The worker’s utility is the wage received minus the cost of working. This cost is the disutility of work. It includes fatigue, stress, health costs, family strain, commuting burden, and the opportunity cost of leisure.
The utility of worker i is therefore a function of wage and the cost of work. With simple calculus and game theory, one can derive the conditions under which workers move towards either a high-productivity or low-productivity equilibrium.
There are three broad cases.
Low-productivity equilibrium
The first case is one in which wages decline as productivity rises. This sounds odd, but it can occur in systems where advancement depends less on output and more on patronage.
A highly productive worker with weak connections may earn less than a less productive worker with access to favours. In such a system, productivity is not rewarded. Workers have little reason to become more productive. The system settles into a low-productivity equilibrium.
Parts of bureaucratic systems in developing countries can fall into this category. The problem is not work ethic. It is incentive design.
The second case is more common. Wages rise with productivity, but the cost of working rises faster. This can happen in hard manual work, mining, construction, and stressful corporate jobs. The extra hour may bring extra pay, but it also brings disproportionate physical or mental cost.
Here too, workers settle into a low-productivity equilibrium. The wage incentive is not strong enough to offset the disutility of work. Longer hours then produce fatigue rather than efficiency.
High-productivity equilibrium
The third case is different. Wages rise with productivity, and the wage gain exceeds the rise in the cost of working. Workers are then rewarded enough to offset fatigue, stress, or lost leisure.
This is the condition for a high-productivity equilibrium.
It is more likely in firms that offer strong wage incentives, clear performance rewards, better facilities, flexible work systems, health support, and credible career progression. Such jobs attract workers not merely because they demand more, but because they compensate better and reduce the cost of effort.
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The lesson is simple. Longer working hours are not inherently bad. Some workers may choose longer hours if the reward is adequate. Some sectors may need longer shifts. Some firms may be able to structure work in ways that raise both effort and compensation.
But a general call for longer hours is poor economics. It ignores the wage-productivity link. It ignores the cost of work. It assumes production can be raised without damaging productivity.
Longer hours need better incentives
If firms want workers to work longer, three conditions must hold. Wages must rise with productivity. The cost of work must be contained. The worker must believe that extra effort will be rewarded.
That requires better facilities, safer workplaces, mental health support, flexible hours where possible, better management, and stronger wage incentives. It also requires an end to systems where connections beat competence.
A high-productivity equilibrium will raise production, wages, GDP, and working conditions. That is the outcome India should seek.
The risk is different. India may extend working hours without fixing incentives. That would raise fatigue, not productivity. It would leave workers stuck in a low-productivity equilibrium, with longer workdays and modest gains in output.
India does not need a culture of longer hours. It needs firms and institutions that make every hour more productive.
Siddhartha Bhasker is an Associate Professor of Economics at Jindal Global University, Sonipat. He works in the field of Climate Change, Game theory, and labour economics. He has completed his studies from IIT Kharagpur and IIM Ahmedabad.