Work and Leisure in the U.S. And Europe: Why so Different?

76 Pages Posted: 17 Aug 2005

See all articles by Alberto F. Alesina

Alberto F. Alesina

Harvard University - Department of Economics; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

Edward L. Glaeser

Harvard University - Department of Economics; Brookings Institution; National Bureau of Economic Research (NBER)

Bruce Sacerdote

Dartmouth College - Department of Economics; National Bureau of Economic Research (NBER)

Multiple version iconThere are 3 versions of this paper

Date Written: July 2005

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: Hours worked, labor unions, taxation, Europe

JEL Classification: E00, J30

Suggested Citation

Alesina, Alberto F. and Glaeser, Edward L. and Sacerdote, Bruce, Work and Leisure in the U.S. And Europe: Why so Different? (July 2005). CEPR Discussion Paper No. 5140. Available at SSRN: https://ssrn.com/abstract=785144

Alberto F. Alesina (Contact Author)

Harvard University - Department of Economics ( email )

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Edward L. Glaeser

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Bruce Sacerdote

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