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Monday, May 29, 2006

Memorial Day Musings

Different countries "do" public holidays differently. In the United States, government offices are closed on several named holidays, but businesses are not otherwise restricted. In other countries, all businesses are restricted either de jure or de facto.  In Germany, for example, shops must be closed on all public holidays. In Great Britain, "bank holidays are days upon which banks are (or were) shut and therefore (traditionally) no other businesses could operate." (If I am wrong about businesses being closed in either Germany or Britain, please let me know.)

At first glance, the American approach is preferable. Why force businesses to give days off to all employees? Better to deregulate and allow employers and employees to sort out the right amount and scheduling of vacation time. Moreover, public holidays create real costs. Having everyone go on vacation at the same time leads to sudden spikes in demand for recreation and concomitant inefficiencies, as anyone who sits in traffic jams on holiday weekends can tell you. If holidays are efficient despite these costs, then they will happen naturally, without any help from the state. Arguments that people must be forced by the state to take shared time off are extremely paternalistic.

There are some efficiency rationales for mandating public holidays, however. Mostly, these stem from coordination problems. The value of a holiday may depend on what others are doing on that day. If there is no one around to share a Memorial Day barbeque or watch a Veterans' Parade, then the value of that day is diminished. Left to the private sector, it might be hard to coordinate days off to get enough shared days. For extended families or social networks seeking to get together, relying on everyone to find an appropriate day off may be impossible. Therefore, there is at least some rationale for mandated public holidays.

On balance, I favor the American approach over the British/German approach. By having days off for government workers and strong norms for public holidays, America gets the benefit of shared holidays without imposing on most of its citizens.

If anyone has a different view, however, I am happy to hear it.

Posted by Yair Listokin on May 29, 2006 at 10:34 PM in Culture | Permalink

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Comments

Having everyone go on vacation at the same time leads to sudden spikes in demand for recreation and concomitant inefficiencies, as anyone who sits in traffic jams on holiday weekends can tell you.

On the other hand, it leads to certain efficiencies. Merchants can time promotions or sales for the holiday since a lot of people have a day off at once. And it's good for families and friends, since when they all have the same day off they can plan activities for that day much more easily.

Posted by: Ken Arromdee | May 30, 2006 2:20:55 PM

There's an argument to be made that public civil (non-religious, that is) holidays are important for forming something like a civic nationalism, and form of unity among the members of a country that is no longer unified by ethnicity, religion, origin, etc. This civic nationalism is in turn important to help motivate people to be willing to sacrifice for their country, both for its defense and also for the common good of the members as members in a cooperative scheme. It seems plausible that the general holiday is better for this than the more optional one, though I cannot say for sure. (I'm also not sure the basic argument I note is right, but something like it has a long history, going back at least to Rousseau.)

Posted by: Matt | May 30, 2006 7:58:33 AM

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