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Welfare, employment, and hours of work

Author

Listed:
  • Hall, Axel
  • Gylfi Zoega

Abstract

The authors propose an explanation of why Europeans choose to work fewer hours than Americans and also suffer higher rates of unemployment. Labor market regulations, unemployment benefits, and high levels of public consumption in many European countries reduce, ceteris paribus, the gains from being employed, which makes employed workers ask for higher wages relative to productivity. The higher wages make firms offer fewer vacancies, as well as raising the level of consumption enjoyed by workers, which makes them want to enjoy more leisure because consumption and leisure are complements in the utility function.

Suggested Citation

  • Hall, Axel & Gylfi Zoega, 2019. "Welfare, employment, and hours of work," Economics Discussion Papers 2019-1, Kiel Institute for the World Economy (IfW Kiel).
    • Handle: RePEc:zbw:ifwedp:20191
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    job search; unemployment; working hours;
    All these keywords.

    JEL classification:

    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings

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