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Why Work More? The Impact of Taxes, and Culture of Leisure on Labor Supply in Europe

Author

Listed:
  • Mocan, Naci

    () (Louisiana State University)

  • Pogorelova, Luiza

    () (Louisiana State University)

Abstract

We use micro data from the European Social Survey to investigate the impact of “culture of leisure” and taxes on labor force participation and hours worked of second-generation immigrants who reside in 26 European countries. These individuals are born in Europe, and they have been exposed to institutional, legal and labor market structures of their countries, including the tax rates. Fathers of these individuals are first-generation immigrants who migrated from 81 different countries. We construct measures of "taste for leisure" in the country of origin of each immigrant father. We employ average and marginal taxes for each country of residence, and control for a large set of individual characteristics, in addition to attributes of the country of residence and country of ancestry. The results show that for women, both taxes and culture of leisure impact participation and hours worked. For men, taxes influence labor supply both at the intensive and the extensive margins, but culture of leisure has no impact.

Suggested Citation

  • Mocan, Naci & Pogorelova, Luiza, 2015. "Why Work More? The Impact of Taxes, and Culture of Leisure on Labor Supply in Europe," IZA Discussion Papers 9281, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp9281
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    References listed on IDEAS

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    1. Card, D. & DiNardo, J. & Estes, E., 1998. "The More Things Change: Immigrants and Children of Immigrants in the 1940s, the 1970s, and the 1990s," Papers 97-98-22, California Irvine - School of Social Sciences.
    2. David Card & John DiNardo & Eugena Estes, 2000. "The More Things Change: Immigrants and the Children of Immigrants in the 1940s, the 1970s, and the 1990s," NBER Chapters,in: Issues in the Economics of Immigration, pages 227-270 National Bureau of Economic Research, Inc.
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    5. Alberto F. Alesina & Edward L. Glaeser & Bruce Sacerdote, 2006. "Work and Leisure in the U.S. and Europe: Why So Different?," NBER Chapters,in: NBER Macroeconomics Annual 2005, Volume 20, pages 1-100 National Bureau of Economic Research, Inc.
    6. Ohanian, Lee & Raffo, Andrea & Rogerson, Richard, 2008. "Long-term changes in labor supply and taxes: Evidence from OECD countries, 1956-2004," Journal of Monetary Economics, Elsevier, vol. 55(8), pages 1353-1362, November.
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    17. repec:hrv:faseco:30752839 is not listed on IDEAS
    18. Ljunge, Martin, 2014. "Trust issues: Evidence on the intergenerational trust transmission among children of immigrants," Journal of Economic Behavior & Organization, Elsevier, vol. 106(C), pages 175-196.
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    More about this item

    Keywords

    tax; labor supply; leisure; immigrant; culture; origin;

    JEL classification:

    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • Z1 - Other Special Topics - - Cultural Economics

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