Americans average 25.1 working hours per person in working age per week, but the Germans average 18.6 hours. The average American works 46.2 weeks per year, while the French average 40 weeks per year. Why do western Europeans work so much less than Americans? Recent work argues that these differences result from higher European tax rates, but the vast empirical labor supply literature suggests that tax rates can explain only a small amount of the differences in hours between the U.S. and Europe. Another popular view is that these differences are explained by long-standing European "culture," but Europeans worked more than Americans as late as the 1960s. In this paper, we argue that European labor market regulations, advocated by unions in declining European industries who argued "work less, work all" explain the bulk of the difference between the U.S. and Europe. These policies do not seem to have increased employment, but they may have had a more society-wide influence on leisure patterns because of a social multiplier where the returns to leisure increase as more people are taking longer vacations.
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Length: Date of creation: Apr 2005 Date of revision: Publication status: published as Alberto F. Alesina, Edward L. Glaeser, Bruce Sacerdote. "Work and Leisure in the U.S. and Europe: Why So Different?," in Mark Gertler and Kenneth Rogoff, editors, "NBER Macroeconomics Annual 2005, Volume 20" MIT Press (2006) Handle: RePEc:nbr:nberwo:11278
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Find related papers by JEL classification: J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs E0 - Macroeconomics and Monetary Economics - - General
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Edward L. Glaeser & Bruce I. Sacerdote & Jose A. Scheinkman, 2002.
"The Social Multiplier,"
NBER Working Papers
9153, National Bureau of Economic Research, Inc.
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