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European vs. American Hours Worked: Assessing the Role of the Extensive and Intensive Margins

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  • Langot, François

    ()
    (University of Le Mans)

  • Quintero Rojas, Coralia

    ()
    (University of Le Mans)

Abstract

Europeans have worked less than Americans since the 1970s. In this paper, we quantify the relative importance of the extensive and intensive margins of aggregate hours of market work on the observed differences. Our counterfactual exercises show that the two dimensions of the extensive margin, the employment rate and the participation rate, explain the most of the total-hours-gap between regions. Moreover, both ratios have similar weight. Conversely, the intensive margin, measured by the number of hours worked per employee, has the smallest role.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3846.

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Length: 21 pages
Date of creation: Nov 2008
Date of revision:
Handle: RePEc:iza:izadps:dp3846

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Keywords: hours of market work; participation; employment; intensive and extensive margins;

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References

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  1. Dale T. Mortensen & Christopher A. Pissarides, 1999. "Job Reallocation, Employment Fluctuations and Unemployment," CEP Discussion Papers dp0421, Centre for Economic Performance, LSE.
  2. Lee Ohanian & Andrea Raffo & Richard Rogerson, 2006. "Long-term changes in labor supply and taxes: evidence from OECD countries, 1956-2004," Research Working Paper RWP 06-16, Federal Reserve Bank of Kansas City.
  3. Edward C. Prescott, 2003. "Why do Americans work so much more than Europeans?," Staff Report 321, Federal Reserve Bank of Minneapolis.
  4. Lars Ljungqvist & Thomas J. Sargent, 2008. "Two Questions about European Unemployment," Econometrica, Econometric Society, vol. 76(1), pages 1-29, 01.
  5. Layard, Richard & Nickell, Stephen & Jackman, Richard, 2005. "Unemployment: Macroeconomic Performance and the Labour Market," OUP Catalogue, Oxford University Press, number 9780199279173, Octomber.
  6. Langot, François & Quintero Rojas, Coralia, 2008. "Explaining the Evolution of Hours Worked and Employment across OECD Countries: An Equilibrium Search Approach," IZA Discussion Papers 3364, Institute for the Study of Labor (IZA).
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Cited by:
  1. Christian Merkl & Dennis Wesselbaum, 2009. "Extensive vs. Intensive Margin in Germany and the United States: Any Differences?," Kiel Working Papers 1563, Kiel Institute for the World Economy.
  2. Patureau, Lise, 2012. "Labor market frictions and the international propagation mechanism," Journal of Macroeconomics, Elsevier, vol. 34(1), pages 199-222.
  3. Temel Taskin, 2013. "Intensive Margin and Extensive Margin Adjustments of Labor Market : Turkey versus United States," Working Papers 1339, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.
  4. Coralia Quintero-Rojas, 2008. "Hours worked: Explaining the cross-country differences through the effects of tax/benefit systems on the employment rate," Department of Economics and Finance Working Papers EC200803, Universidad de Guanajuato, Department of Economics and Finance.

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