Labour Taxes and Work Hours in Australia
AbstractIn the 1970s, work hours in Europe were similar to work hours in America, but today Europeans work less than Americans. Prescott (2004) attributes the decline in European work hours to an increase in the effective marginal tax rate on labour income. The Australian labour market experience confirms that the taxation of labour income is an important determinant of the decision to work. In Australia taxes and work hours did not change much in the long-run, but Australian work hours rebounded after a temporary increase in taxes in the 1980s. The resilience of Australian work hours suggests that a return to the tax rates of the 1970s would restore the European labour supply.
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Bibliographic InfoPaper provided by The University of Western Australia, Department of Economics in its series Economics Discussion / Working Papers with number 07-09.
Length: 31 pages
Date of creation: 2007
Date of revision:
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Other versions of this item:
- E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical
- J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
- J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
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