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Forces Shaping Hours Worked in the OECD, 1960-2004

  • Cara McDaniel
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    The goal of this paper is to examine the role of taxes and productivity growth as forces influencing market hours. To achieve this goal, the paper considers a calibrated growth model extended to include home production and subsistence consumption, both of which are found to be key features influencing market hours. The model is simulated for 15 OECD countries. The primary force driving changes in market hours is found to be changing labor income tax rates. Productivity catch-up relative to the United States is found to be an important secondary force. (JEL E24, H24, H31, J22, J24)

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    Article provided by American Economic Association in its journal American Economic Journal: Macroeconomics.

    Volume (Year): 3 (2011)
    Issue (Month): 4 (October)
    Pages: 27-52

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    Handle: RePEc:aea:aejmac:v:3:y:2011:i:4:p:27-52
    Note: DOI: 10.1257/mac.3.4.27
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    1. Mark Aguiar & Erik Hurst, 2006. "Measuring trends in leisure: the allocation of time over five decades," Working Papers 06-2, Federal Reserve Bank of Boston.
    2. David Carey & Josette Rabesona, 2002. "Tax Ratios on Labour and Capital Income and on Consumption," OECD Economic Studies, OECD Publishing, vol. 2002(2), pages 129-174.
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