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Evolution of preferences and cross-country differences in time devoted to market work

  • Luigi Bonatti

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    I model the hypothesis that preferences evolve and permanent differences in individual attitudes towards work emerge between two countries characterized initially by identical preferences as a result of a period in which only one of the two countries is subject to regulations constraining labor supply, or as a by-product of different tax rates on labor income. Hence, the elimination of these regulations may not allow the economy thus deregulated to converge to the same hours of market work per person of the other economy, and the long-run differential in market work between economies subject to different tax rates is amplified.

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    Paper provided by Department of Economics, University of Trento, Italia in its series Department of Economics Working Papers with number 0719.

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    Date of creation: 2007
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    Handle: RePEc:trn:utwpde:0719
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    1. 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.
    2. Linda A. Bell & Richard B. Freeman, 2000. "The Incentive for Working Hard: Explaining Hours Worked Differences in the U.S. and Germany," NBER Working Papers 8051, National Bureau of Economic Research, Inc.
    3. Burda, Michael C. & Hamermesh, Daniel S. & Weil, Philippe, 2007. "Total Work, Gender and Social Norms," IZA Discussion Papers 2705, Institute for the Study of Labor (IZA).
    4. Olivier Blanchard, 2004. "The Economic Future of Europe," Journal of Economic Perspectives, American Economic Association, vol. 18(4), pages 3-26, Fall.
    5. Linda Bell & Richard Freeman, 1994. "Why Do Americans and Germans Work Different Hours?," NBER Working Papers 4808, National Bureau of Economic Research, Inc.
    6. Mark Aguiar & Erik Hurst, 2006. "Measuring Trends in Leisure: The Allocation of Time Over Five Decades," NBER Working Papers 12082, National Bureau of Economic Research, Inc.
    7. Bisin, Alberto & Verdier, Thierry, 1998. "On the cultural transmission of preferences for social status," Journal of Public Economics, Elsevier, vol. 70(1), pages 75-97, October.
    8. Blomquist, N. Soren, 1993. "Interdependent behavior and the effect of taxes," Journal of Public Economics, Elsevier, vol. 51(2), pages 211-218, June.
    9. Olivier Blanchard & Justin Wolfers, 1999. "The Role of Shocks and Institutions in the Rise of European Unemployment: The Aggregate Evidence," NBER Working Papers 7282, National Bureau of Economic Research, Inc.
    10. Aronsson, Thomas & Sjögren, Tomas, 2006. "Optimal Income Taxation and Social Norms in the Labor Market," Umeå Economic Studies 672, Umeå University, Department of Economics.
    11. Davis, Steven J. & Henrekson, Magnus, 2004. "Tax Effects on Work Activity, Industry Mix and Shadow Economy Size: Evidence from Rich-Country Comparisons," SSE/EFI Working Paper Series in Economics and Finance 560, Stockholm School of Economics.
    12. Samuel Bowles, 1998. "Endogenous Preferences: The Cultural Consequences of Markets and Other Economic Institutions," Journal of Economic Literature, American Economic Association, vol. 36(1), pages 75-111, March.
    13. Martin Binder & Uta-Maria Niederle, 2006. "Institutions as Determinants of Preference Change – A One Way Relation?," Papers on Economics and Evolution 2006-07, Philipps University Marburg, Department of Geography.
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