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Understanding Growth and Inequality Trends: The Role of Labour Supply in the US and Germany

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Author Info
Lars Osberg

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Abstract

Between 1980 and 2000, average actual working hours per adult rose by 234 in the United States while falling by 170 in Germany. These trends imply that growth in per capita GDP may be a poor indicator of trends in average economic well-being and that trends in money income inequality may misrepresent trends in the inequality of economic well-being. Is greater inequality in the US the incentive that motivates greater work effort by Americans? Differentials in average usual working hours largely arise from differences in workforce participation -- particularly among women and older men. Except for the extreme lower tail, the distribution of usual working hours of prime age males is essentially identical and constant in Germany and the US -- which implies that the grea ter inequality of earnings in the US has no noticeable incentive effect on the labour supply of workers.

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File URL: http://economics.ca/cgi/jab?journal=cpp&view=v29s1/CPPv29s1p163.pdf
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Publisher Info
Article provided by University of Toronto Press in its journal Canadian Public Policy.

Volume (Year): 29 (2003)
Issue (Month): s1 (January)
Pages: 163-184
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Handle: RePEc:cpp:issued:v:29:y:2003:i:s1:p:163-184

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References listed on IDEAS
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  1. Heckman, James J, 1993. "What Has Been Learned about Labor Supply in the Past Twenty Years?," American Economic Review, American Economic Association, vol. 83(2), pages 116-21, May. [Downloadable!] (restricted)
  2. Linda Bell & Richard Freeman, 1994. "Why Do Americans and Germans Work Different Hours?," NBER Working Papers 4808, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  3. Osberg, Lars & Phipps, Shelley, 1993. "Labour Supply with Quantity Constraints: Estimates from a Large Sample of Canadian Workers," Oxford Economic Papers, Oxford University Press, vol. 45(2), pages 269-91, April. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Alesina, Alberto F & Glaeser, Edward L & Sacerdote, Bruce, 2005. "Work and Leisure in the US and Europe: Why So Different?," CEPR Discussion Papers 5140, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  2. repec:ese:iserwp: is not listed on IDEAS
  3. Jenkins, Stephen P. & Osberg, Lars, 2003. "Nobody to Play With? The Implications of Leisure Coordination," IZA Discussion Papers 850, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  4. Merz, Joachim & Osberg, Lars, 2006. "Keeping in Touch – A Benefit of Public Holidays," MPRA Paper 5738, University Library of Munich, Germany. [Downloadable!]
    Other versions:
  5. Heather Boushey & Christian E. Weller, 2006. "Inequality and Household Economic Hardship in the United States of America," Working Papers 18, United Nations, Department of Economics and Social Affairs. [Downloadable!]
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