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Long-Term Changes in Labor Supply and Taxes: Evidence from OECD Countries, 1956-2004

  • Lee Ohanian
  • Andrea Raffo
  • Richard Rogerson

We document large differences in trend changes in hours worked across OECD countries over the period 1956-2004. We then assess the extent to which these changes are consistent with the intratemporal first order condition from the neoclassical growth model. We find large and trending deviations from this condition, and that the model can account for virtually none of the changes in hours worked. We then extend the model to incorporate observed changes in taxes. Our findings suggest that taxes can account for much of the variation in hours worked both over time and across countries.

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File URL: http://www.nber.org/papers/w12786.pdf
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 12786.

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Date of creation: Dec 2006
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Publication status: published as 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.
Handle: RePEc:nbr:nberwo:12786
Note: EFG PE LS
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