Working Paper: NBER ID: w4808
Authors: Linda Bell; Richard Freeman
Abstract: This paper documents the difference between the annual hours worked by employed Americans and Germans, decomposes the difference into differences due to vacation and holiday time and to hours worked while on the job, and examines alternative explanations for the difference. Employed Americans work roughly 10-15% more hours than Germans. Since American employment-population rates exceed those of Germans, adult Americans average some 20% more work time than adult Germans. At the same time, Americans show greater preference for additional hours worked than do Germans. Both of these differences developed in the past 20 years. Two decades ago, Americans worked less than Germans, and it was the Germans who wanted to work more hours. Standard labor supply analyses do not appear able to explain this difference. We show that differences in hours worked are related to differences in earnings inequality across countries, and hypothesize that the high rewards to success in the U.S., lack of job security, and low social safety net compared to Germany or other European countries may explain the cross-country differences in an extended supply model.
Keywords: work hours; labor supply; cultural differences; Germany; United States
JEL Codes: J22; J31
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Higher earnings inequality in the U.S. (D31) | Longer work hours in the U.S. (J29) |
| Preference for additional hours worked (J29) | Longer work hours in the U.S. (J29) |
| Differences in labor market conditions (J49) | Differences in hours worked between Americans and Germans (J22) |
| Differences in vacation and holiday time (J22) | Reduction in work hours in the U.S. (J22) |
| Cultural factors (Z10) | Differences in hours worked between Americans and Germans (J22) |