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Welfare Policy and the Distribution of Hours of Work

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  • L. Rachel Ngai
  • Christopher A. Pissarides

Abstract

We examine the distribution of hours of work across industrial sectors in OECD countries. We find large disparities when sectors are divided into three groups: one that produces goods without home substitutes and two others that have home substitutes — health and social work, and all others. We attribute the disparities to the countries' tax and subsidy policies. High taxation substantially reduces hours in sectors that have close home substitutes but less so in other sectors. Health and social care subsidies increase hours in that sector. We compute these effects for nineteen OECD countries.

Suggested Citation

  • L. Rachel Ngai & Christopher A. Pissarides, 2009. "Welfare Policy and the Distribution of Hours of Work," CEP Discussion Papers dp0962, Centre for Economic Performance, LSE.
  • Handle: RePEc:cep:cepdps:dp0962
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    References listed on IDEAS

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    Cited by:

    1. Bastagli, Francesca & Hills, John, 2013. "What gives? Household consumption patterns and the‘Big Trade Off’ with public consumption," LSE Research Online Documents on Economics 51275, London School of Economics and Political Science, LSE Library.

    More about this item

    Keywords

    hours of work; employment shares; home production; childcare; tax wedge; welfare state; social subsidies;

    JEL classification:

    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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