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Explaining Differences in Hours Worked among OECD Countries: An empirical analysis

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  • Orsetta Causa

    (OECD)

Abstract

This working paper investigates the policy determinants of hours worked among employed individuals in OECD countries, focussing on the impact of taxation, working-time regulations, and other labour and product market policies. It explores the factors underlying cross-country differences in hours worked — in line with previous aggregate approaches — while at the same time it looks more closely at labour force heterogeneity — in the vein of microeconomic labour supply models. The paper shows that policies and institutions have a different impact on working hours of men and women. Firstly, while high marginal taxes create a disincentive to work longer hours for women, their impact on hours worked by men is almost insignificant. Secondly, working-time regulations have a significant impact on hours worked by men, and this impact differs across education categories. Thirdly, other labour and product market policies, in particular stringent employment protection of workers on regular contracts and competition-restraining product market policies, have a negative impact on hours worked by men, over and beyond their impact on employment levels. Expliquer les différences d'heures travaillées dans les pays de l'OCDE : une analyse empirique Résumé: Cet article analyse les déterminants politiques des heures travaillées par la population employée dans les pays de l‘OCDE. Ce travail porte sur l‘impact des taxes, des réglementations du temps de travail, et des politiques du marché du travail et du marché des produits sur la marge intensive de l‘utilisation du travail. Il s‘interroge sur les facteurs sous-jacents les différences d‘heures travaillées — en ligne avec les approches agrégées — mais analyse également l‘hétérogénéité de la force de travail-dans la veine des analyses microéconomiques de l‘offre de travail. Cet article montre que les politiques et les institutions ont un impact sur les heures travaillées par différentes sous-populations composant la force de travail. Pour résumer, tandis que les heures travaillées par les femmes sont sensibles à la fiscalité du travail, les heures travaillées par les hommes répondent davantage aux réglementations sur la durée du temps de travail ainsi qu‘aux politiques du marché du travail et du marché des produits. Premièrement, alors qu‘un niveau élevé de taxation marginale implique une désincitation à augmenter le nombre d‘heures travaillées chez les femmes, l‘impact de la fiscalité sur les heures travaillées par les hommes est nul. Deuxièmement, la réglementation sur la durée du temps de travail a un impact significatif sur les heures travaillées par les hommes, et cet impact varie en fonction du niveau d‘éducation. Troisièmement, d‘autres politiques structurelles, et en particulier la rigueur de la protection de l‘emploi sur les contrats permanents, ainsi qu‘une réglementation anti compétitive du marché des produits, ont un impact négatif sur les heures travaillées par les hommes, par-delà leur impact sur leur niveau d‘emploi.

Suggested Citation

  • Orsetta Causa, 2008. "Explaining Differences in Hours Worked among OECD Countries: An empirical analysis," OECD Economics Department Working Papers 596, OECD Publishing.
  • Handle: RePEc:oec:ecoaaa:596-en
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    File URL: http://dx.doi.org/10.1787/244230044118
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    Citations

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    Cited by:

    1. Torben Andersen, 2010. "Why do Scandinavians Work?," CESifo Working Paper Series 3068, CESifo Group Munich.
    2. Vinod Mishra & Russell Smyth, 2012. "Work Hours in Chinese Enterprises: Evidence From Matched Employer-Employee Data," Monash Economics Working Papers 10-12, Monash University, Department of Economics.
    3. Jose Emilio Boscá & Rafael Domenech & Javier Ferri, 2008. "Tax Reforms and Labour-market Performance: An Evaluation for Spain using REMS," Working Papers 0804, International Economics Institute, University of Valencia.
    4. Eduardo Lora & Johanna Fajardo-González, 2016. "Employment and taxes in Latin America: An empirical study of the effects of payroll, corporate income and value-added taxes on labor outcomes," REVISTA CUADERNOS DE ECONOMÍA, UN - RCE - CID, vol. 35(Especial ), pages 75-117, January.
    5. José E. Boscá & Rafael Doménech & Javier Ferri, 2013. "Fiscal Devaluations in EMU," Hacienda Pública Española, IEF, vol. 206(3), pages 27-56, September.
    6. Crafts, Nicholas, 2012. "Western Europe's Growth Prospects: an Historical Perspective," CEPR Discussion Papers 8827, C.E.P.R. Discussion Papers.
    7. Chen, Been-Lon & Lai, Chih-Fang, 2015. "Effects of labor taxes and unemployment compensation on labor supply in a search model with an endogenous labor force," Journal of Macroeconomics, Elsevier, vol. 43(C), pages 300-317.
    8. repec:wfo:monber:y:2018:i:2:p:105-120 is not listed on IDEAS
    9. Sebastian Barnes & Romain Bouis & Philippe Briard & Sean Dougherty & Mehmet Eris, 2013. "The GDP Impact of Reform: A Simple Simulation Framework," OECD Economics Department Working Papers 834, OECD Publishing.
    10. Tino Berger & Freddy Heylen, 2011. "Differences in Hours Worked in the OECD: Institutions or Fiscal Policies?," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 43(7), pages 1333-1369, October.
    11. Åsa Johansson, 2016. "Public Finance, Economic Growth and Inequality: A Survey of the Evidence," OECD Economics Department Working Papers 1346, OECD Publishing.
    12. repec:ilo:ilowps:456740 is not listed on IDEAS
    13. Serguey Ivanov, 2009. "Demographic and economic factors of labour supply: Long-term projections and policy options for France, Germany, Italy and the United Kingdom," Vienna Yearbook of Population Research, Vienna Institute of Demography (VID) of the Austrian Academy of Sciences in Vienna, vol. 7(1), pages 83-122.
    14. Kolev, Alexandre. & Saget, Catherine., 2010. "Are middle-paid jobs in OECD countries disappearing? : An overview," ILO Working Papers 994567403402676, International Labour Organization.

    More about this item

    Keywords

    heures travaillées; labour market policies; labour supply; offre de travail; politique du marché du travail; réglementation du temps de travail; taxation; taxation; working hours; working time regulations;

    JEL classification:

    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J58 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Public Policy

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