Explaining Differences in Hours Worked among OECD Countries: an empirical analysis

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Explaining Differences in Hours Worked among OECD Countries: an empirical analysis

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Orsetta Causa

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Orsetta Causa

Abstract

This working paper investigates the policy determinants of hours worked among employed individuals in OECD countries, focussing on the impact of taxation, working-time regulations, and other labour and product market policies. It explores the factors underlying cross-country differences in hours worked — in line with previous aggregate approaches — while at the same time it looks more closely at labour force heterogeneity — in the vein of microeconomic labour supply models. The paper shows that policies and institutions have a different impact on working hours of men and women. Firstly, while high marginal taxes create a disincentive to work longer hours for women, their impact on hours worked by men is almost insignificant. Secondly, working-time regulations have a significant impact on hours worked by men, and this impact differs across education categories. Thirdly, other labour and product market policies, in particular stringent employment protection of workers on regular contracts and competition-restraining product market policies, have a negative impact on hours worked by men, over and beyond their impact on employment levels.

Expliquer les différences d’heures travaillées dans les pays de l’OCDE : une analyse empirique
Résumé: Cet article analyse les déterminants politiques des heures travaillées par la population employée dans les pays de l‘OCDE. Ce travail porte sur l‘impact des taxes, des réglementations du temps de travail, et des politiques du marché du travail et du marché des produits sur la marge intensive de l‘utilisation du travail. Il s‘interroge sur les facteurs sous-jacents les différences d‘heures travaillées — en ligne avec les approches agrégées — mais analyse également l‘hétérogénéité de la force de travail-dans la veine des analyses microéconomiques de l‘offre de travail. Cet article montre que les politiques et les institutions ont un impact sur les heures travaillées par différentes sous-populations composant la force de travail. Pour résumer, tandis que les heures travaillées par les femmes sont sensibles à la fiscalité du travail, les heures travaillées par les hommes répondent davantage aux réglementations sur la durée du temps de travail ainsi qu‘aux politiques du marché du travail et du marché des produits. Premièrement, alors qu‘un niveau élevé de taxation marginale implique une désincitation à augmenter le nombre d‘heures travaillées chez les femmes, l‘impact de la fiscalité sur les heures travaillées par les hommes est nul. Deuxièmement, la réglementation sur la durée du temps de travail a un impact significatif sur les heures travaillées par les hommes, et cet impact varie en fonction du niveau d‘éducation. Troisièmement, d‘autres politiques structurelles, et en particulier la rigueur de la protection de l‘emploi sur les contrats permanents, ainsi qu‘une réglementation anti compétitive du marché des produits, ont un impact négatif sur les heures travaillées par les hommes, par-delà leur impact sur leur niveau d‘emploi.

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Paper provided by OECD, Economics Department in its series OECD Economics Department Working Papers with number 596.

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Date of creation: 10 Mar 2008
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Handle: RePEc:oec:ecoaaa:596-en

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Find related papers by JEL classification:
H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
J58 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Public Policy

This paper has been announced in the following NEP Reports:

NEP-ALL-2008-03-25 (All new papers)
NEP-CBA-2008-03-25 (Central Banking)
NEP-EEC-2008-03-25 (European Economics)
NEP-LAB-2008-03-25 (Labour Economics)

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T. Berger & F. Heylen, 2009. "Differences in hours worked in the OECD: institutions or fiscal policies?," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 09/601, Ghent University, Faculty of Economics and Business Administration. [Downloadable!]

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