Work and taxes: allocation of time in OECD countries
AbstractPolicymakers devote a great deal of attention to short-run fluctuations in the labor market. Central banks monitor indicators of labor market tightness in the conduct of monetary policy due to the potential implications for inflation. And fiscal authorities are concerned with the budget consequences of fluctuations in the labor market because they affect both revenues and expenditure programs. More generally, these fluctuations may be associated with significant losses in welfare. ; This article stems from a striking empirical observation about long-run variations in labor market outcomes: Long-run changes in total hours of work in OECD countries exceed the variation of hours worked over the business cycle in a representative country (say, the United States) by almost an order of magnitude. If understanding changes in hours of work of the magnitude of business cycle fluctuations is an important policy concern, then understanding the sources of these trend differences is also crucial. Surprisingly, the academic and policy debates have focused on the business cycle movements in the labor market, almost ignoring low frequency changes. ; Lee Ohanian, Andrea Raffo, and Richard Rogerson describe the steep decline in average hours worked and the large variation across countries in the magnitude of this decline. Next, they find that changes in labor taxes account for a large share of the trend differences. Finally, they find that countries with high tax rates devote less time to market work, but more time to home activities, such as cooking and cleaning. Moreover, this reallocation of time from market work to home work is much stronger for females than for males.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Federal Reserve Bank of Kansas City in its journal Economic Review.
Volume (Year): (2007)
Issue (Month): Q III ()
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.:
- Edward C. Prescott, 2004.
"Why do Americans work so much more than Europeans?,"
Federal Reserve Bank of Minneapolis, issue Jul, pages 2-13.
- Edward C. Prescott, 2003. "Why do Americans work so much more than Europeans?," Staff Report 321, Federal Reserve Bank of Minneapolis.
- Edward C. Prescott, 2004. "Why do Americans Work so Much More than Europeans?," NBER Working Papers 10316, National Bureau of Economic Research, Inc.
- Edward C. Prescott, 2004. "Why Do Americans Work So Much More Than Europeans?," Levine's Bibliography 122247000000000413, UCLA Department of Economics.
- Alberto Alesina & Edward L. Glaeser & Bruce Sacerdote, 2005.
"Work and Leisure in the U.S. and Europe: Why So Different?,"
NBER Working Papers
11278, National Bureau of Economic Research, Inc.
- Alberto F. Alesina & Edward L. Glaeser & Bruce Sacerdote, 2006. "Work and Leisure in the U.S. and Europe: Why So Different?," NBER Chapters, in: NBER Macroeconomics Annual 2005, Volume 20, pages 1-100 National Bureau of Economic Research, Inc.
- Alberto Alesina & Edward Glaeser & Bruce Sacerdote, 2005. "Work and Leisure in the U. S. and Europe: Why so Different?," Harvard Institute of Economic Research Working Papers 2068, Harvard - Institute of Economic Research.
- 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.
- Blanchard, Olivier & Wolfers, Justin, 2000.
"The Role of Shocks and Institutions in the Rise of European Unemployment: The Aggregate Evidence,"
Royal Economic Society, vol. 110(462), pages C1-33, March.
- Olivier Blanchard & Justin Wolfers, 1999. "The Role of Shocks and Institutions in the Rise of European Unemployment: The Aggregate Evidence," NBER Working Papers 7282, National Bureau of Economic Research, Inc.
- Conny Olovsson, 2004.
"Why do Europeans Work so Little?,"
2004 Meeting Papers
760, Society for Economic Dynamics.
- Richard Rogerson, 2007.
"Taxation and market work: is Scandinavia an outlier?,"
Springer, vol. 32(1), pages 59-85, July.
- Richard Rogerson, 2007. "Taxation and Market Work: Is Scandinavia an Outlier?," NBER Working Papers 12890, National Bureau of Economic Research, Inc.
- Richard B. Freeman & Ronald Schettkat, 2005. "Marketization of household production and the EU-US gap in work," Economic Policy, CEPR & CES & MSH, vol. 20(41), pages 6-50, 01.
- Ian Dew-Becker & Robert J. Gordon, 2008.
"The Role of Labor Market Changes in the Slowdown of European Productivity Growth,"
NBER Working Papers
13840, National Bureau of Economic Research, Inc.
- Dew-Becker, Ian & Gordon, Robert J, 2008. "The Role of Labour Market Changes in the Slowdown of European Productivity Growth," CEPR Discussion Papers 6722, C.E.P.R. Discussion Papers.
- Casarico, Alessandra & Sommacal, Alessandro, 2008.
"Labour Income Taxation, Human Capital and Growth: The Role of Child Care,"
CEPR Discussion Papers
7039, C.E.P.R. Discussion Papers.
- Alessandra Casarico & Alessandro Sommacal, 2012. "Labor Income Taxation, Human Capital, and Growth: The Role of Childcare," Scandinavian Journal of Economics, Wiley Blackwell, vol. 114(4), pages 1182-1207, December.
- Alessandra Casarico & Alessandro Sommacal, 2008. "Labor Income Taxation, Human Capital and Growth: The Role of Child Care," CESifo Working Paper Series 2363, CESifo Group Munich.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Lu Dayrit).
If references are entirely missing, you can add them using this form.