Why Do Americans Work So Much More Than Europeans为什么美国人比欧洲人更努力工作.pptVIP

Work and Leisure in the US and Europe: Why so Different? Alesina, Glaeser and Sacerdote, Working paper Summary Americans now work substantially more than Europeans; wasn’t true 40 years ago Prescott studies a simple representative agent model Finds that taxes can explain all the differences in labor supply I will augment Prescott’s work with other info, especially from Alesina, Glaeser and Sacerdote (henceforth AGS, 2005) Also, some cameos by Dew-Becker and Gordon, 2007 US vs EU E/N Raw Data for Hours Per Employee The basic facts European labor supply fell throughout the postwar period Both intensive and extensive margins EU labor productivity caught up to the US Output per capita never gained Prescott’s question: what explains the changes in employment? The theory Standard RBC framework, Where c is consumption, h is hours Highly stylized, but a reasonable starting point Unit IES, no wealth effects on labor supply α is key in determining labor supply Budget Constraint: tc, tax on consumption tx, investment tax; x investment; δ depreciation th, marginal tax on labor tk, capital income tax Tt, transfers; Gov’t gives all the tax revenue back The key is the price of consumption relative to leisure; depends on tc and th Key equilibrium conditions Labor supply: Wage: Elasticity of hours wrt wages: Prescott calibrates α to match the average level of employment Elasticity is 0.77 This is roughly the same number one gets by regressing employment on taxes Labor Taxes in Europe Taxes on second earners Labor supply increase in the US between ’70 and ’93 is entirely driven by married women Single women are a small part of the working age population… 1986 tax reform reduced taxes on second earners (see next slide) A similar reform in Spain raised labor supply by 12 percent AGS on labor supply elasticity Note that α governs both the level of employment and the elasticity wrt taxes The elasticity is zero if you have no unearned income Prescott’s η=0.77 Labor literature says ηme