Arbeitspapier
Why Are Average Hours Worked Lower in Richer Countries?
Why are average hours worked per adult lower in rich countries than in poor countries? We consider two natural explanations: income effects in preferences, in which leisure becomes more valuable when income rises, and distortionary tax systems, which are more prevalent in richer countries. To assess the importance of these two forces, we build a simple model of labor supply by heterogeneous individuals and calibrate it to match international data on labor income taxation, government transfers relative to GDP, and hours worked per adult. The model predicts that income effects are the main driving force behind the decline of average hours worked with GDP per capita. We reach a similar conclusion in an extended model that matches cross-country patterns of labor supply along the extensive and intensive margins and of the prevalence of subsistence self-employment.
- Language
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Englisch
- Bibliographic citation
-
Series: CESifo Working Paper ; No. 8251
- Classification
-
Wirtschaft
Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
Time Allocation and Labor Supply
Macroeconomic Analyses of Economic Development
- Subject
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hours worked
income effects
taxation
- Event
-
Geistige Schöpfung
- (who)
-
Bick, Alexander
Fuchs-Schündeln, Nicola
Lagakos, David
Tsujiyama, Hitoshi
- Event
-
Veröffentlichung
- (who)
-
Center for Economic Studies and ifo Institute (CESifo)
- (where)
-
Munich
- (when)
-
2020
- Handle
- Last update
- 10.03.2025, 11:46 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Bick, Alexander
- Fuchs-Schündeln, Nicola
- Lagakos, David
- Tsujiyama, Hitoshi
- Center for Economic Studies and ifo Institute (CESifo)
Time of origin
- 2020
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Why Are Average Hours Worked Lower in Richer Countries?
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Why do BLS hours series tell different stories about trends in hours worked?
Why do bls hours series tell different stories about trends in hours worked?
How Do Average Hours Worked Vary with Development? Cross-Country Evidence and Implications
Bargaining frictions and hours worked
Persistence and cycles in US hours worked
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Persistence and cycles in US hours worked
Panel Tests for Unit Roots in Hours Worked
Hours Worked of the Self-Employed and Agglomeration