Country-Specific Preferences and Employment Rates in Europe

42 Pages Posted: 21 Sep 2015

See all articles by Simone Moriconi

Simone Moriconi

Catholic University of the Sacred Heart of Milan

Giovanni Peri

University of California, Davis - Department of Economics

Date Written: September 2015

Abstract

European countries exhibit significant differences in employment rates of adult males. Differences in labor-leisure preferences, partly determined by cultural values that vary across countries, can be responsible for part of these differences. However, differences in labor market institutions, productivity, and skills of the labor force are also crucial factors and likely correlated with preferences. In this paper we use variation among first- and second-generation cross-country European migrants to isolate the effect of culturally transmitted labor-leisure preferences on individual employment rates. If migrants maintain some of their country of origin labor-leisure preferences as they move to different labor market conditions, we can separate the impact of preferences from the effect of other factors. We find country-specific labor-leisure preferences explain about 24% of the top-bottom variation in employment rates across European countries.

Suggested Citation

Moriconi, Simone and Peri, Giovanni, Country-Specific Preferences and Employment Rates in Europe (September 2015). NBER Working Paper No. w21561. Available at SSRN: https://ssrn.com/abstract=2663199

Simone Moriconi (Contact Author)

Catholic University of the Sacred Heart of Milan ( email )

Largo Gemelli, 1
Via Necchi 9
Milan, MI 20123
Italy

Giovanni Peri

University of California, Davis - Department of Economics ( email )

One Shields Drive
Davis, CA 95616-8578
United States
530-752-3033 (Phone)
530-752-9382 (Fax)

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