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Explaining Canada-U.S. Differences in Annual Hours Worked

Author

Listed:
  • Alberto Isgut
  • Lance Bialas
  • James Milway

Abstract

Employed Canadians worked an average of 157 hours less per year than employed Americans during 1997-2004. This one month less per year spent on the job is a significant contributor to the difference in GDP per capita between Canada and the United States. This article provides a detailed examination of the factors underlying the Canada-United States gap in annual hours worked. We find that over 40 per cent of the gap can be explained by a higher propensity of Canadians to take full-weeks off, mainly for vacations. Furthermore, over a quarter of the intensity gap is explained by a higher incidence of part-time work in Canada, and much of this reflects the higher proportion of Canada's part-time workers who have difficulties finding full-time work. We find that Canada's higher union coverage rates and labour standards are more important factors to explain the hours gap than differences in marginal tax rates. Canada's less robust economy is also relevant. Finally, we find that highincome Canadians take considerably more weeks of vacation per year than their American counterparts and are less likely to work long work weeks.

Suggested Citation

  • Alberto Isgut & Lance Bialas & James Milway, 2006. "Explaining Canada-U.S. Differences in Annual Hours Worked," International Productivity Monitor, Centre for the Study of Living Standards, vol. 13, pages 27-45, Fall.
  • Handle: RePEc:sls:ipmsls:v:13:y:2006:3
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    File URL: http://www.csls.ca/ipm/13/IPM-13-isgutetal-e.pdf
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    Citations

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    Cited by:

    1. Jiun-Nan Pan & Kuang-Ta Lo & Jr-Tsung Huang, 2008. "Are Rich Earners Time-Privileged in Taiwan? The Evidence from 1981 to 2006," Journal of Family and Economic Issues, Springer, vol. 29(4), pages 584-600, December.
    2. Jean-Philippe Cotis, 2006. "Benchmarking Canada's Economic Performance," International Productivity Monitor, Centre for the Study of Living Standards, vol. 13, pages 3-20, Fall.
    3. Andrew Sharpe, 2007. "Three Policies to Improve Productivity Growth in Canada," CSLS Research Reports 2007-05, Centre for the Study of Living Standards.
    4. Andrew Sharpe & Jill Hardt, 2006. "Five Deaths a Day: Workplace Fatalities in Canada, 1993-2005," CSLS Research Reports 2006-04, Centre for the Study of Living Standards.

    More about this item

    Keywords

    GDP per capita; Hours worked; Productivity gap; Part-time workers; Labour standards; Marginal tax rates;

    JEL classification:

    • C80 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - General
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • D10 - Microeconomics - - Household Behavior - - - General

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