Why do Europeans Work so Little?
Market work per person is roughly 10 percent higher in the U.S. than in Sweden. However, if we include the work carried out in home production, the total amount of work only differs by 1 percent. I set up a model with home production, and show that differences in policy - mainly taxes – can account for the discrepancy in labor supply between Sweden and the U.S. Moreover, even though the elasticity of labor supply is rather low for individual households, labor taxes are estimated to be associated with considerable output losses. I also show that policy can account for the falling trend in market work in Sweden since 1960. The largest reduction occurs from 1960 until around 1980, both in the model and the data. After the early 1980s, the trends for both taxes and actual hours worked are basically flat. This is also true for hours worked in the model.
|Date of creation:||09 Feb 2004|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.iies.su.se/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Richard Rogerson, 2006. "Structural Transformation and the Labor Market," 2006 Meeting Papers 256, Society for Economic Dynamics.
- Martin Browning & Lars Peter Hansen & James J. Heckman, 1999.
"Micro Data and General Equilibrium Models,"
99-10, University of Copenhagen. Department of Economics.
- Lindbeck, Assar, 1982. "Tax Effects versus Budget Effects on Labor Supply," Economic Inquiry, Western Economic Association International, vol. 20(4), pages 473-89, October.
- Schneider, Friedrich, 2002. "The Size and Development of the Shadow Economies of 22 Transition and 21 OECD Countries," IZA Discussion Papers 514, Institute for the Study of Labor (IZA).
- Juster, F. Thomas & Stafford, Frank P., 1990.
"The Allocation of Time: Empirical Findings, Behavioural Models, and Problems of Measurement,"
Working Paper Series
258, Research Institute of Industrial Economics.
- Juster, F Thomas & Stafford, Frank P, 1991. "The Allocation of Time: Empirical Findings, Behavioral Models, and Problems of Measurement," Journal of Economic Literature, American Economic Association, vol. 29(2), pages 471-522, June.
- Stephen Nickell, 2004.
"Employment and taxes,"
LSE Research Online Documents on Economics
19955, London School of Economics and Political Science, LSE Library.
- Edward C. Prescott, 2004.
"Why do Americans work so much more than Europeans?,"
Federal Reserve Bank of Minneapolis, issue Jul, pages 2-13.
- Edward C. Prescott, 2004. "Why Do Americans Work So Much More Than Europeans?," Levine's Bibliography 122247000000000413, UCLA Department of Economics.
- Edward C. Prescott, 2004. "Why do Americans Work so Much More than Europeans?," NBER Working Papers 10316, National Bureau of Economic Research, Inc.
- Edward C. Prescott, 2003. "Why do Americans work so much more than Europeans?," Staff Report 321, Federal Reserve Bank of Minneapolis.
- Jonsson, Magnus & Klein, Paul, 2003. "Tax distortions in Sweden and the United States," European Economic Review, Elsevier, vol. 47(4), pages 711-729, August.
- Chatterjee, Satyajit, 1994. "Transitional dynamics and the distribution of wealth in a neoclassical growth model," Journal of Public Economics, Elsevier, vol. 54(1), pages 97-119, May.
When requesting a correction, please mention this item's handle: RePEc:hhs:iiessp:0727. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Hanna Christiansson)
If references are entirely missing, you can add them using this form.