Emulation, Inequality, and Work Hours: Was Thorsten Veblen Right?
We investigate Veblen effects on work hours, namely the way that a desire to emulate the consumption standards of the rich induces longer work hours among the rest. Consistent with our model of these asymmetric social comparisons, greater inequality predicts longer work hours in ten OECD countries over the period 1963-1998. The country fixed effects estimates of the impact of inequality on hours are large, robust, and cannot be explained by conventional incentive effects. In the presence of Veblen effects, a social welfare optimum cannot be implemented by a flat tax on consumption but may be accomplished by progressive consumption taxes.
|Date of creation:||Nov 2004|
|Contact details of provider:|| Postal: Thompson Hall, Amherst, MA 01003|
Web page: http://www.umass.edu/economics
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Oswald, Andrew J., 1983. "Altruism, jealousy and the theory of optimal non-linear taxation," Journal of Public Economics, Elsevier, vol. 20(1), pages 77-87, February.
- Sen, Amartya, 1983. "Poor, Relatively Speaking," Oxford Economic Papers, Oxford University Press, vol. 35(2), pages 153-169, July.
- Harold L. Cole & George J. Mailath & Andrew Postlewaite, 1995.
"Incorporating concern for relative wealth into economic models,"
Federal Reserve Bank of Minneapolis, issue Sum, pages 12-21.
- Harold L. Cole & George J. Mailath & Andrew Postlewaite, "undated". ""Incorporating Concern for Relative Wealth into Economic Models''," CARESS Working Papres 95-14, University of Pennsylvania Center for Analytic Research and Economics in the Social Sciences.
- Clark, Andrew E & Oswald, Andrew J, 1993.
"Satisfaction and Comparison Income,"
Economics Discussion Papers
10018, University of Essex, Department of Economics.
- Ireland, Norman J., 1994. "On limiting the market for status signals," Journal of Public Economics, Elsevier, vol. 53(1), pages 91-110, January.
- David Neumark & Andrew Postlewaite, 1995.
"Relative Income Concerns and the Rise in Married Women's Employment,"
NBER Working Papers
5044, National Bureau of Economic Research, Inc.
- Neumark, David & Postlewaite, Andrew, 1998. "Relative income concerns and the rise in married women's employment," Journal of Public Economics, Elsevier, vol. 70(1), pages 157-183, October.
- Landers, Renee M & Rebitzer, James B & Taylor, Lowell J, 1996. "Rat Race Redux: Adverse Selection in the Determination of Work Hours in Law Firms," American Economic Review, American Economic Association, vol. 86(3), pages 329-348, June.
- Richard B. Freeman, 2002.
"The labour market in the new information economy,"
LSE Research Online Documents on Economics
20062, London School of Economics and Political Science, LSE Library.
- BÃ¶heim, RenÃ© & Taylor, Mark P., 2001.
"Actual and preferred working hours,"
ISER Working Paper Series
2001-06, Institute for Social and Economic Research.
- Linda Bell, 1998. "Differences in Work Hours and Hours Preferences by Race in the U.S," Review of Social Economy, Taylor & Francis Journals, vol. 56(4), pages 481-500.
- 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.
- 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.
- Michael J. Boskin & Eytan Sheshinski, 1978. "Optimal Redistributive Taxation When Individual Welfare Depends upon Relative Income," The Quarterly Journal of Economics, Oxford University Press, vol. 92(4), pages 589-601.
- Corneo, Giacomo & Jeanne, Olivier, 1997. "Conspicuous consumption, snobbism and conformism," Journal of Public Economics, Elsevier, vol. 66(1), pages 55-71, October.
- Bagwell, Laurie Simon & Bernheim, B Douglas, 1996. "Veblen Effects in a Theory of Conspicuous Consumption," American Economic Review, American Economic Association, vol. 86(3), pages 349-373, June.
- Eric Alden Smith & Samuel Bowles & Herbert Gintis, 2000. "Costly Signaling and Cooperation," Working Papers 00-12-071, Santa Fe Institute.
- Michael Spence, 1973. "Job Market Signaling," The Quarterly Journal of Economics, Oxford University Press, vol. 87(3), pages 355-374.
- Layard, Richard, 1980. "Human Satisfactions and Public Policy," Economic Journal, Royal Economic Society, vol. 90(363), pages 737-750, December.
When requesting a correction, please mention this item's handle: RePEc:ums:papers:2004-14. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Daniele Girardi)
If references are entirely missing, you can add them using this form.