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

Listed author(s):
  • Naci Mocan

    ()

    (Louisiana State University, NBER and IZA)

  • Luiza Pogorelova

    ()

    (Louisiana State University)

Registered author(s):

    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.

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    File URL: http://eaf.ku.edu.tr/sites/eaf.ku.edu.tr/files/erf_wp_1514.pdf
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    Paper provided by Koc University-TUSIAD Economic Research Forum in its series Koç University-TUSIAD Economic Research Forum Working Papers with number 1514.

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    Length: 48 pages
    Date of creation: Aug 2015
    Handle: RePEc:koc:wpaper:1514
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    Web page: http://erf.ku.edu.tr
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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.
    3. Olovsson, Conny, 2015. "Optimal taxation with home production," Journal of Monetary Economics, Elsevier, vol. 70(C), pages 39-50.
    4. Raquel Fernández & Alessandra Fogli, 2006. "Fertility: The Role of Culture and Family Experience," Journal of the European Economic Association, MIT Press, vol. 4(2-3), pages 552-561, 04-05.
    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.
    7. Edward C. Prescott, 2004. "Why do Americans work so much more than Europeans?," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Jul, pages 2-13.
    8. Richard Rogerson, 2008. "Structural Transformation and the Deterioration of European Labor Market Outcomes," Journal of Political Economy, University of Chicago Press, vol. 116(2), pages 235-259, 04.
    9. Giavazzi, Francesco & Petkov, Ivan & Schiantarelli, Fabio, 2014. "Culture: Persistence and Evolution," CEPR Discussion Papers 10024, C.E.P.R. Discussion Papers.
    10. Alberto Alesina & Nicola Fuchs-Schündeln, 2007. "Goodbye Lenin (or Not?): The Effect of Communism on People," American Economic Review, American Economic Association, vol. 97(4), pages 1507-1528, September.
    11. Alessandra Fogli & Raquel Fernandez, 2009. "Culture: An Empirical Investigation of Beliefs, Work, and Fertility," American Economic Journal: Macroeconomics, American Economic Association, vol. 1(1), pages 146-177, January.
    12. Alberto Alesina & Yann Algan & Pierre Cahuc & Paola Giuliano, 2015. "Family Values And The Regulation Of Labor," Journal of the European Economic Association, European Economic Association, vol. 13(4), pages 599-630, 08.
    13. Conny Olovsson, 2009. "Why Do Europeans Work So Little?," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 50(1), pages 39-61, 02.
    14. Alberto Alesina & Paola Giuliano, 2011. "Family Ties And Political Participation," Journal of the European Economic Association, European Economic Association, vol. 9(5), pages 817-839, October.
    15. Erzo F. P. Luttmer & Monica Singhal, 2011. "Culture, Context, and the Taste for Redistribution," American Economic Journal: Economic Policy, American Economic Association, vol. 3(1), pages 157-179, February.
    16. Naci H. Mocan & Colin Cannonier, 2012. "Empowering Women Through Education: Evidence from Sierra Leone," NBER Working Papers 18016, National Bureau of Economic Research, Inc.
    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.
    19. Paola Giuliano & Antonio Spilimbergo, 2014. "Growing up in a Recession," Review of Economic Studies, Oxford University Press, vol. 81(2), pages 787-817.
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