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Evolution of preferences and cross-country differences in time devoted to market work

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  • Luigi Bonatti

Abstract

I model the hypothesis that preferences evolve and permanent differences in individual attitudes towards work emerge between two countries characterized initially by identical preferences as a result of a period in which only one of the two countries is subject to regulations constraining labor supply, or as a by-product of different tax rates on labor income. Hence, the elimination of these regulations may not allow the economy thus deregulated to converge to the same hours of market work per person of the other economy, and the long-run differential in market work between economies subject to different tax rates is amplified.

Suggested Citation

  • Luigi Bonatti, 2007. "Evolution of preferences and cross-country differences in time devoted to market work," Department of Economics Working Papers 0719, Department of Economics, University of Trento, Italia.
    • Handle: RePEc:trn:utwpde:0719
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    References listed on IDEAS

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    More about this item

    Keywords

    Endogenous growth; time allocation; endogenous preferences; labor-market regulations; labor taxes.;
    All these keywords.

    JEL classification:

    • D10 - Microeconomics - - Household Behavior - - - General
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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