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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. Steven J. Davis & Magnus Henrekson, 2004. "Tax Effects on Work Activity, Industry Mix and Shadow Economy Size: Evidence from Rich-Country Comparisons," NBER Working Papers 10509, National Bureau of Economic Research, Inc.
    2. 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.
    3. Burda, Michael C & Hamermesh, Daniel S. & Weil, Philippe, 2007. "Total Work, Gender and Social Norms," CEPR Discussion Papers 6232, C.E.P.R. Discussion Papers.
    4. 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.
    5. Alberto Alesina & Edward Glaeser & Bruce Sacerdote, 2005. "Work and Leisure in the U. S. and Europe: Why so Different?," Harvard Institute of Economic Research Working Papers 2068, Harvard - Institute of Economic Research.
    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. Linda Bell & Richard Freeman, 1994. "Why Do Americans and Germans Work Different Hours?," NBER Working Papers 4808, National Bureau of Economic Research, Inc.
    8. Aronsson, Thomas & Sjögren, Tomas, 2006. "Optimal Income Taxation and Social Norms in the Labor Market," Umeå Economic Studies 672, Umeå University, Department of Economics.
    9. Blomquist, N.S., 1991. "Interdependent Behavio and the Effect of Taxes," Papers 1991f, Uppsala - Working Paper Series.
    10. Olivier Blanchard, 2004. "The Economic Future of Europe," Journal of Economic Perspectives, American Economic Association, vol. 18(4), pages 3-26, Fall.
    11. Blanchard, Olivier & Wolfers, Justin, 2000. "The Role of Shocks and Institutions in the Rise of European Unemployment: The Aggregate Evidence," Economic Journal, Royal Economic Society, vol. 110(462), pages C1-33, March.
    12. Bell, Linda A. & Freeman, Richard B., 2001. "The incentive for working hard: explaining hours worked differences in the US and Germany," Labour Economics, Elsevier, vol. 8(2), pages 181-202, May.
    13. 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.
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