Why Do Americans Work So Much More Than Europeans?

Posted: 1 Aug 2008

See all articles by Edward C. Prescott

Edward C. Prescott

Arizona State University (ASU) - Economics Department; National Bureau of Economic Research (NBER)

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Date Written: November 1, 2003


Americans now work 50 percent more than do the Germans, French, and Italians. This was not the case in the early 1970s when the Western Europeans worked more than Americans. In this paper, I examine the role of taxes in accounting for the differences in labor supply across time and across countries, in particular, the effective marginal tax rate on labor income. The population of countries considered is that of the G-7 countries, which are major advanced industrial countries. The surprising finding is that this marginal tax rate accounts for the predominance of the differences at points in time and the large change in relative labor supply over time with the exception of the Italian labor supply in the early 1970s.

Keywords: International Labor Supply, International Tax Rates, Social Security Reform

JEL Classification: E13, E24, E62, H2

Suggested Citation

Prescott, Edward C., Why Do Americans Work So Much More Than Europeans? (November 1, 2003). Available at SSRN: https://ssrn.com/abstract=1188942

Edward C. Prescott (Contact Author)

Arizona State University (ASU) - Economics Department ( email )

Tempe, AZ 85287-3806
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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