Working Paper: NBER ID: w11278
Authors: Alberto Alesina; Edward Glaeser; Bruce Sacerdote
Abstract: Americans average 25.1 working hours per person in working age per week, but the Germans average 18.6 hours. The average American works 46.2 weeks per year, while the French average 40 weeks per year. Why do western Europeans work so much less than Americans? Recent work argues that these differences result from higher European tax rates, but the vast empirical labor supply literature suggests that tax rates can explain only a small amount of the differences in hours between the U.S. and Europe. Another popular view is that these differences are explained by long-standing European "culture," but Europeans worked more than Americans as late as the 1960s. In this paper, we argue that European labor market regulations, advocated by unions in declining European industries who argued "work less, work all" explain the bulk of the difference between the U.S. and Europe. These policies do not seem to have increased employment, but they may have had a more society-wide influence on leisure patterns because of a social multiplier where the returns to leisure increase as more people are taking longer vacations.
Keywords: Labor Supply; Work Hours; Union Policies; Taxation
JEL Codes: J3; E0
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| European labor market regulations (J48) | reduction in work hours (J22) |
| union policies (J58) | reduction in work hours (J22) |
| unions advocated for reduced work hours (J51) | influenced leisure patterns (J29) |
| social multiplier effect (C31) | attractiveness of leisure (J29) |
| number of individuals engaging in leisure activities (L83) | leisure patterns (J29) |
| tax rates (H29) | labor supply (J20) |
| unionization and labor regulations (J50) | differences in work hours (J22) |
| legally mandated holidays (J38) | differences in work hours (J22) |
| labor regulations and unionization (J58) | differences in work hours (J22) |