Interesting fact: Holidays do affect productivity - positively [1]. As an Austrian, I have to say that I can't imagine life without holidays. I'm self-employed now and don't go on vacation as much as employees, but I really need the occasional week off (also, I'm working way less hours). I once heard of a study that Europeans are as productive as Americans, although they work much less (could not find it, here is an article on the issue [2]).

My girlfriend is psychology student and they told her in a lecture that studies have shown that productivity ROI massively declines if working more than 30 hours per week (again, no citation, shame on me). That surely depends on whether you really do focussed work, or if you spend the workdays socializing at the water dispenser or coffee machine.

[1] http://www.vacationgap.com/ [2] http://www.businessweek.com/globalbiz/content/aug2009/gb2009...