Do We Need More Public Holidays?

Again, Indonesians enjoyed another long weekend as there were two subsequent public holidays on last Thursday and Friday (20 and 21 March for Maulid Nabi Muhammad SAW and Easter Day). In 2008, most Indonesians enjoy 26 public holidays, similar to Myanmarians, Filipinos, Cambodians, Saudis and Iranians. Citizens of other developed economies and even of Vietnam (that just embraced market system recently and would like to be the next China) don’t have such high luxury. Vietnamese may think that too much holidays will slow down the rate of convergence process they’re now working on. While Indonesia’s level of inward investment has yet to reach the pre-crisis level, Indonesia doubled its number of public holidays during the period of 1997-2008. Do we need more or less public holidays? What is the optimum number of public holidays? First glance at the table below suggests that the association between number of public holidays and countries’ level of development may not be straightforward.


Country/Economy # of Public Holidays
1997* 2008**
Vietnam n.a. 10
United States 10 11
Spore 12 11
Taiwan n.a. 12
South Korea 17 15
Israel 24 15
UK 8 16
Brunei Darussalam n.a. 17
Malaysia 14 19
Hongkong 16 19
Irak 19 20
Thailand 16 22
Japan 20 22
China 9 22
Australia 10 23
Filipina 12 25
Saudi Arabia 19 25
Indonesia 12 26
Myanmar 18 27
Cambodia n.a. 31
Iran 24 31
India*** 11 43
*, Source: www.unesco.org
**, Source: www.qppstudio.net
***, India actually has three national public holidays, the others are regional in
nature or limited to certain religious/ethnic/linguistic groups.


One may argue that more public holidays will yield higher social capital which is good for society. Joachim Merz and Lars Osberg (2006), using the variation in public holidays across German Länder (regional unit), argue that public holidays have beneficial impacts on social life and there is a case to be made for more public holidays. Critics would say that the empirical work may suffer of endogeniety problem. In addition, nowadays, where people’s social knits are largely work-based social networks, more public holidays might reduce or, at least, hinder the accumulation of social capital. More public holidays should not be regarded as infinite addition. Suppose, there’s no such problem of endogeneity and social capital indeed takes place outside business realm, (i.e. more public holidays indeed add more social capital linearly), and there will be another problem: what is the optimum level of social capital? Social capital in itself also contains inherent defect, that is negative externality that possibly reduce trust to external members, the outsiders of the group. In total, it may act like zero or even negative sum game for the society. Next, in a country like Indonesia which is presumably more social capital abundant country than Germany, do we really need more social capital? Or, are more public holidays worth taking to have more social capital? Why not through other means to accumulate more social capital?

One may also argue that more public holidays will solve, in economic jargon, coordination problem (among family members or at least, between working spouses) to have some more time together. It may be true, but, what about coordination problem among business partners? More public holidays may actually delay the execution of business plan on hand.

Social capital is always necessary for Indonesia or for every society. Yet, Indonesia is hungry for and in severe competition with other countries for inward investment to add its capital stock. Otherwise, economic growth can not be sustained. Also, it’s too early for Indonesians to be a leisure society. We need to learn better how to be working class society. In local dimension, public holidays can spur local economic development, especially in places that to be favorite vacation destination. But, overall, we need more working days (and better quality of work) and less holidays. Don’t let Brian May write another song for Indonesians: “Too Much Holiday Will Kill You”