What are the economics of Leap Year?

Asked by elbanditoroso (33518

) January 31st, 2016

There’s an extra day this month, in case you haven’t been paying attention.

It seems like people who get paid hourly will do a little better in February, because they’ll be working an extra day that, in previous years didn’t exist.

On the other hand, salaried people are working an extra day without any additional compensation, so they’re losing out.

One would expect that almost all retail would show a 3.5% increase in income (½8) over last year’s February figures, since, again, there’s an extra day.

I wonder if that’s true.

What other economic effects are there as a result of Leap Year?

Observing members: 0

Composing members: 0

2 Answers

It’s also a Presidential election year, which more than offsets any potential gain from an extra day’s productivity in the year. Far more than offsets, in fact.

EDIT: However, even most of us who work for a salary get paid by the week, meaning we get paid “hourly, but on a weekly or bi-weekly basis”. Which means that we get paid for more hours in February this year than we do in the non-leap years, but we still get paid for the hours.

And since most companies’ productivity is not exactly straight-line, where every day is the equal of every other day, it would be a stretch to suggest that an extra day’s production is going to add to the annual production numbers by an exactly divisible amount. For some it might, but not many, I think.

CWOTUS (26102

)“Great Answer” (1

) Flag as…

It adds an extra trading day to the securities markets. February is not a very active market for the most part, so it does not mean a significant increase in revenue, but spreads fixed costs out over another day, so the Finance department is in a better mood, even though not dancing on their desks.

zenvelo (39545

)“Great Answer” (1

) Flag as…