Emulation, Inequality, and Work Hours: Was Thorsten Veblen Right?

16 Pages Posted: 7 Dec 2005

See all articles by Samuel Bowles

Samuel Bowles

Santa Fe Institute; University of Massachusetts

Yongjin Park

Connecticut College - Department of Economics

Abstract

We investigate the manner in which a desire to emulate the rich influences individuals' allocation of time between labour and leisure, greater inequality inducing longer work hours as a result. Data on work hours in ten countries over the period 1963-1998 show that greater inequality is indeed associated longer work hours. These 'Veblen effects' are large and the estimates are robust using country fixed effects and other specifications. Because consumption inequality is a public bad, a social welfare optimum cannot be implemented by a flat tax on consumption but may be accomplished by more complicated (progressive) consumption taxes.

Suggested Citation

Bowles, Samuel and Park, Yongjin, Emulation, Inequality, and Work Hours: Was Thorsten Veblen Right?. Economic Journal, Vol. 115, No. 507, pp. F397-F412, November 2005. Available at SSRN: https://ssrn.com/abstract=856711 or http://dx.doi.org/10.1111/j.1468-0297.2005.01042.x

Samuel Bowles (Contact Author)

Santa Fe Institute ( email )

1399 Hyde Park Rd
Santa Fe, NM 87501
United States
505-984-8800 (Phone)
505-982-0565 (Fax)

HOME PAGE: http://www.santafe.edu

University of Massachusetts ( email )

Amherst, MA 01002
United States
413-545-2590 (Phone)

HOME PAGE: http://www-unix.oit.umass.edu/~bowles/

Yongjin Park

Connecticut College - Department of Economics ( email )

New London, CT 06320
United States
(860) 439-2514 (Phone)

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