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Investments That Pay When South Korean Workaholics Play

Investments That Pay When South Korean Workaholics Play by Sammy Suzuki, AllianceBernstein

The notoriously workaholic South Koreans are starting to kick back and take life a bit easier—and it’s already fostering brisk growth across a wide swath of consumer-centric businesses. Investors, take note.

South Koreans are still the world champs of hard work. They took only seven of their allowed 15 days of vacation in 2014, well below the 24-nation average of 19.5 days, according to online travel agency Expedia Inc (NASDAQ:EXPE)’s most recent Vacation Deprivation study. All told, South Koreans worked nearly 25% longer than their developed-world counterparts that year. But those hours of toil have been declining steadily for the past several decades, and are now 25% below where they were in the mid-1980s (Display).

Time to Take It Easy

Expect them to continue trending lower. Both the government and large Korean companies have launched campaigns to encourage workers to take more time off, prompted by signs that this excessive industriousness was taking a heavy societal toll. Long hours have not translated into greater labor productivity: South Korean productivity is well below developed-world levels despite much faster GDP growth. Overwork has also been linked to the country’s high rates of suicide and industrial injury.

It is also important to note that fewer work hours haven’t meant smaller paychecks. According to government statistics, the average full-time Korean worker earned 3.4 million won (US$3,229) a month in 2014, up 36% from...