Americans work more than Europeans…

or do they?

The conventional view is that Americans work longer hours than Germans and other Europeans but when time in household production is included, overall working time is very similar on both sides of the Atlantic. Americans spend more time on market work but German invest more in household production. This paper examines whether these differences in the allocation of time can be explained by differences in the incentive structure, this is by the tax wedge and differences in the wage differentials, as economic theory suggests. Its analysis of unique time-use data reveals that the differences in time-allocation patterns can indeed be explained by economic variables.

This means its not culture.

(h/t The Economist)

5 Responses to “Americans work more than Europeans…”

  • swong says:

    Hm, that paper was clearer than I expected. I wonder which country is closer to the transitional zone where the costs of self-support start to exceed the cost of calling for assistance.

    Anyway

    1: That paper doesn’t really address vacation time.
    2: The paper seems to assume compensation on an hourly basis; the idea that I should work an extra hour, collect extra pay for that hour, use a portion of that pay to have someone spend an hour doing my chores, and come out slightly ahead. All of the people I see putting in extra time are salaried, and don’t collect bonuses or overtime pay, so there doesn’t seem to be a direct cash incentive structure prompting them to put in extra time. Two plausible explanations I can think of are:
    a. work addiction
    b. perceived strengthening of job security

  • pushmedia1 says:

    Well, I think the interesting margin isn’t the number of hours people choose to work. Most people don’t choose the number hours to work, anyway.

    The interesting margin is those housewives thinking of getting into the job market or the teenagers who’s parents are making them do chores unless they get a job. Slightly better tax treatment for working (i.e. lower income taxes) might push these marginal people into the labor market.

    Since its been 4 hours since I skimmed the paper, I can’t remember if this was there or not… Women in the U.S. actually work less than their German counter-parts when considering home production.

  • swong says:

    I suspect that culture defines the border zones of that margin.

    A domestic (man or woman, hey it’s the 90′s, er… I mean 00′s) is faced with the choice of a clean house, a paying job with a dirty house, or splitting their pay with a housekeeper and managing a housekeeper. I suspect that there’s some elasticity between those choices if you think of price as effort, not strictly cash. A domestic has to alter their hygiene standards on entering the workforce, accepting that the laundry and dishes might not get done every day. There’s another hill to climb between the working household and the working household with servants: allowing strangers into one’s home to mess with one’s belongings. These seem like cultural barriers.

    That’s not even getting into the “do-it-yourself’ers” who do the bulk of home maintenance tasks like gardening, auto maintenance, minor plumbing repairs, etc. It was a big step when my father finally started to say “Fuck it, I’m calling a plumber to deal with this shit,” whenever the toilet backed up. I think the cash price of services plays a bigger role in those decisions, though.

  • pushmedia1 says:

    yeah, but it seems the cultural aspect are just a thin veneer on the economic.

  • swong says:

    Surely a researcher could find lots of natural experiments, like whenever a small town’s tax laws change substantially.