How Much Does a Public Holiday Cost Us? – Debate on Introducing Another Public Holiday in the Northern Federal States

In Lower Saxony, Bremen, Hamburg and Schleswig-Holstein, the introduction of another public holiday is currently being discussed, after Reformation Day was celebrated as a public holiday throughout Germany for the first time in 2017. Arne Hansen and Dirk Meyer, Helmut Schmidt University, University of the Federal Armed Forces, Hamburg, have examined the possible impact of another public holiday on gross domestic product. They conclude that the impact can be very different depending on the economic sector and whether the public holiday falls on a weekend. As a rule, a decline in production and a cost effect are noticeable: the paid holiday and holiday supplements increase labour costs. Insofar as this is not compensated by increases in productivity, there is a negative employment effect, goods prices tend to rise and profits decline.