[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/a/eee/labeco/v72y2021ics0927537121000890.html
   My bibliography  Save this article

Cross-country differences in preferences for leisure

Author

Listed:
  • Ek, Andreas
Abstract
The starting point of this paper is to document considerable cross-country variation in the “labor wedge”, a common measure of labor market frictions. Its variation is theoretically isomorphic to differences in a preference-for-leisure parameter. The paper proceeds to investigate what might explain the variation. It presents three separate empirical exercises supportive of the view that, to a substantial extent, cross-sectional labor-wedge differences are capturing systematic differences in leisure preferences. Firstly, in cross-country regressions, a cultural measure of preferences for leisure, elicited from the World Values Survey, contains economically larger and statistically more robust explanatory power than do traditional measures of labor market frictions. Secondly, following the epidemiological approach, individual-level data on labor-supply choices of descendants of immigrants in the United States and Sweden line up with what an “inherited” preference for leisure would predict. Thirdly, in the spirit of an out-of-sample test, the paper looks at the implication of differences in preferences for cross-country differences in optimal labor taxation. Economic theory suggests a negative association between preferences for leisure and labor taxes; empirical data verify the theoretical prediction.

Suggested Citation

  • Ek, Andreas, 2021. "Cross-country differences in preferences for leisure," Labour Economics, Elsevier, vol. 72(C).
    • Handle: RePEc:eee:labeco:v:72:y:2021:i:c:s0927537121000890
    DOI: 10.1016/j.labeco.2021.102054
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0927537121000890
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.labeco.2021.102054?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Richard Rogerson, 2006. "Understanding Differences in Hours Worked," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 9(3), pages 365-409, July.
    2. Moriconi, Simone & Peri, Giovanni, 2019. "Country-specific preferences and employment rates in Europe," European Economic Review, Elsevier, vol. 116(C), pages 1-27.
    3. Diego Restuccia & Guillaume Vandenbroucke, 2014. "Explaining Educational Attainment across Countries and over Time," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 17(4), pages 824-841, October.
    4. Edward C. Prescott, 2004. "Why do Americans work so much more than Europeans?," Quarterly Review, Federal Reserve Bank of Minneapolis, vol. 28(Jul), pages 2-13.
    5. Yann Algan & Pierre Cahuc, 2010. "Inherited Trust and Growth," American Economic Review, American Economic Association, vol. 100(5), pages 2060-2092, December.
    6. Hall, Robert E, 1997. "Macroeconomic Fluctuations and the Allocation of Time," Journal of Labor Economics, University of Chicago Press, vol. 15(1), pages 223-250, January.
    7. Raj Chetty, 2012. "Bounds on Elasticities With Optimization Frictions: A Synthesis of Micro and Macro Evidence on Labor Supply," Econometrica, Econometric Society, vol. 80(3), pages 969-1018, May.
    8. Raquel Fernandez, 2007. "Women, Work, and Culture," NBER Working Papers 12888, National Bureau of Economic Research, Inc.
    9. Sascha O. Becker & Ludger Woessmann, 2009. "Was Weber Wrong? A Human Capital Theory of Protestant Economic History," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 124(2), pages 531-596.
    10. Guido Tabellini, 2010. "Culture and Institutions: Economic Development in the Regions of Europe," Journal of the European Economic Association, European Economic Association, vol. 8(4), pages 677-716, June.
    11. Diego Restuccia & Guillaume Vandenbroucke, 2014. "Explaining Educational Attainment across Countries and over Time," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 17(4), pages 824-841, October.
    12. Fernández, Raquel, 2007. "Women, Work and Culture," CEPR Discussion Papers 6153, C.E.P.R. Discussion Papers.
    13. repec:hal:spmain:info:hdl:2441/432sbils8u9t7qa99cii5psht1 is not listed on IDEAS
    14. Alessandra Fogli & Raquel Fernandez, 2009. "Culture: An Empirical Investigation of Beliefs, Work, and Fertility," American Economic Journal: Macroeconomics, American Economic Association, vol. 1(1), pages 146-177, January.
    15. Thomas Dohmen & Armin Falk & David Huffman & Uwe Sunde, 2012. "The Intergenerational Transmission of Risk and Trust Attitudes," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 79(2), pages 645-677.
    16. Chetty, Raj, 2006. "A general formula for the optimal level of social insurance," Journal of Public Economics, Elsevier, vol. 90(10-11), pages 1879-1901, November.
    17. Richard Rogerson, 2009. "Market Work, Home Work, and Taxes: A Cross‐Country Analysis," Review of International Economics, Wiley Blackwell, vol. 17(3), pages 588-601, August.
    18. Richard Rogerson, 2008. "Structural Transformation and the Deterioration of European Labor Market Outcomes," Journal of Political Economy, University of Chicago Press, vol. 116(2), pages 235-259, April.
    19. Luigi Guiso & Paola Sapienza & Luigi Zingales, 2006. "Does Culture Affect Economic Outcomes?," Journal of Economic Perspectives, American Economic Association, vol. 20(2), pages 23-48, Spring.
    20. Susumu Imai & Michael P. Keane, 2004. "Intertemporal Labor Supply and Human Capital Accumulation," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 45(2), pages 601-641, May.
    21. Alberto Alesina & Edward L. Glaeser & Bruce Sacerdote, 2005. "Work and Leisure in the U.S. and Europe: Why So Different?," NBER Working Papers 11278, National Bureau of Economic Research, Inc.
    22. Ohanian, Lee & Raffo, Andrea & Rogerson, Richard, 2008. "Long-term changes in labor supply and taxes: Evidence from OECD countries, 1956-2004," Journal of Monetary Economics, Elsevier, vol. 55(8), pages 1353-1362, November.
    23. Mark Aguiar & Erik Hurst, 2007. "Measuring Trends in Leisure: The Allocation of Time Over Five Decades," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 122(3), pages 969-1006.
    24. Armin Falk & Anke Becker & Thomas Dohmen & Benjamin Enke & David B. Huffman & Uwe Sunde, 2017. "Global Evidence on Economic Preferences," NBER Working Papers 23943, National Bureau of Economic Research, Inc.
    25. Andreas BUEHN & Friedrich SCHNEIDER, 2016. "Size and Development of Tax Evasion in 38 OECD Coutries: What do we (not) know?," Journal of Economics and Political Economy, KSP Journals, vol. 3(1), pages 1-11, March.
    26. Armin Falk & Anke Becker & Thomas Dohmen & Benjamin Enke & David Huffman & Uwe Sunde, 2018. "Global Evidence on Economic Preferences," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 133(4), pages 1645-1692.
    27. Urban Jermann & Vincenzo Quadrini, 2012. "Macroeconomic Effects of Financial Shocks," American Economic Review, American Economic Association, vol. 102(1), pages 238-271, February.
    28. Cara McDaniel, 2011. "Forces Shaping Hours Worked in the OECD, 1960-2004," American Economic Journal: Macroeconomics, American Economic Association, vol. 3(4), pages 27-52, October.
    29. Loukas Karabarbounis, 2014. "The Labor Wedge: MRS vs. MPN," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 17(2), pages 206-223, April.
    30. Alexander Bick & Nicola Fuchs-Schündeln & David Lagakos, 2018. "How Do Hours Worked Vary with Income? Cross-Country Evidence and Implications," American Economic Review, American Economic Association, vol. 108(1), pages 170-199, January.
    31. V. V. Chari & Patrick J. Kehoe & Ellen R. McGrattan, 2007. "Business Cycle Accounting," Econometrica, Econometric Society, vol. 75(3), pages 781-836, May.
    32. Mendoza, Enrique G. & Razin, Assaf & Tesar, Linda L., 1994. "Effective tax rates in macroeconomics: Cross-country estimates of tax rates on factor incomes and consumption," Journal of Monetary Economics, Elsevier, vol. 34(3), pages 297-323, December.
    33. Alexander Bick & Bettina Brüggemann & Nicola Fuchs‐Schündeln, 2019. "Hours Worked in Europe and the United States: New Data, New Answers," Scandinavian Journal of Economics, Wiley Blackwell, vol. 121(4), pages 1381-1416, October.
    34. Friedrich Schneider, 2012. "The Shadow Economy and Tax Evasion: What Do We (Not) Know?," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 13(02), pages 03-12, July.
    35. Urban Jermann & Vincenzo Quadrini, 2012. "Erratum: Macroeconomic Effects of Financial Shocks," American Economic Review, American Economic Association, vol. 102(2), pages 1186-1186, April.
    36. Francesco Giavazzi & Fabio Schiantarelli & Michel Serafinelli, 2013. "Attitudes, Policies, And Work," Journal of the European Economic Association, European Economic Association, vol. 11(6), pages 1256-1289, December.
    37. Bisin, Alberto & Verdier, Thierry, 2001. "The Economics of Cultural Transmission and the Dynamics of Preferences," Journal of Economic Theory, Elsevier, vol. 97(2), pages 298-319, April.
    38. Luigi Guiso & Paola Sapienza & Luigi Zingales, 2009. "Cultural Biases in Economic Exchange?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 124(3), pages 1095-1131.
    39. Luigi Guiso & Paola Sapienza & Luigi Zingales, 2007. "Social Capital as Good Culture," Economics Working Papers ECO2007/57, European University Institute.
    40. Alberto Alesina & George-Marios Angeletos, 2005. "Fairness and Redistribution," American Economic Review, American Economic Association, vol. 95(4), pages 960-980, September.
    41. Robert Shimer, 2009. "Convergence in Macroeconomics: The Labor Wedge," American Economic Journal: Macroeconomics, American Economic Association, vol. 1(1), pages 280-297, January.
    42. Casey B. Mulligan, 2002. "A Century of Labor-Leisure Distortions," NBER Working Papers 8774, National Bureau of Economic Research, Inc.
    43. Naci H. Mocan & Luiza Pogorelova, 2015. "Why Work More? The Impact of Taxes, and Culture of Leisure on Labor Supply in Europe," NBER Working Papers 21297, National Bureau of Economic Research, Inc.
    44. Skibińska, Małgorzata, 2016. "What drives the labour wedge? A comparison between CEE countries and the Euro Area," Economic Modelling, Elsevier, vol. 56(C), pages 148-161.
    45. Raquel Fernández, 2007. "Alfred Marshall Lecture Women, Work, and Culture," Journal of the European Economic Association, MIT Press, vol. 5(2-3), pages 305-332, 04-05.
    46. Alberto Alesina & Paola Giuliano, 2015. "Culture and Institutions," Journal of Economic Literature, American Economic Association, vol. 53(4), pages 898-944, December.
    47. Antecol, Heather, 2000. "An examination of cross-country differences in the gender gap in labor force participation rates," Labour Economics, Elsevier, vol. 7(4), pages 409-426, July.
    48. Greenwood, Jeremy & Hercowitz, Zvi & Huffman, Gregory W, 1988. "Investment, Capacity Utilization, and the Real Business Cycle," American Economic Review, American Economic Association, vol. 78(3), pages 402-417, June.
    49. Cristina Arellano & Yan Bai & Patrick J. Kehoe, 2019. "Financial Frictions and Fluctuations in Volatility," Journal of Political Economy, University of Chicago Press, vol. 127(5), pages 2049-2103.
    50. Alberto Bisin & Giorgio Topa & Thierry Verdier, 2004. "Cooperation as a Transmitted Cultural Trait," Rationality and Society, , vol. 16(4), pages 477-507, November.
    51. Luigi Guiso & Paola Sapienza & Luigi Zingales, 2008. "Alfred Marshall Lecture Social Capital as Good Culture," Journal of the European Economic Association, MIT Press, vol. 6(2-3), pages 295-320, 04-05.
    52. Wallenius, Johanna, 2013. "Social security and cross-country differences in hours: A general equilibrium analysis," Journal of Economic Dynamics and Control, Elsevier, vol. 37(12), pages 2466-2482.
    53. Naci Mocan & Luiza Pogorelova, 2015. "Why Work More? The Impact of Taxes, and Culture of Leisure on Labor Supply in Europe," Koç University-TUSIAD Economic Research Forum Working Papers 1514, Koc University-TUSIAD Economic Research Forum.
    54. Mocan, Naci & Pogorelova, Luiza, 2015. "Why Work More? The Impact of Taxes, and Culture of Leisure on Labor Supply in Europe," IZA Discussion Papers 9281, Institute of Labor Economics (IZA).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ahmad, Khalil & Shahid, Muhammad & Bhatti, Muhammad Kashif & Ali, Amjad, 2024. "Global Perspectives on Fiscal Policy and Labor Income-Leisure Choices: Theoretical and Practical Insights," MPRA Paper 121283, University Library of Munich, Germany.
    2. repec:hal:cdiwps:hal-04801563 is not listed on IDEAS

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Francesco Giavazzi & Ivan Petkov & Fabio Schiantarelli, 2019. "Culture: persistence and evolution," Journal of Economic Growth, Springer, vol. 24(2), pages 117-154, June.
    2. Alberto Bisin & Thierry Verdier, 2010. "The Economics of Cultural Transmission and Socialization," NBER Working Papers 16512, National Bureau of Economic Research, Inc.
    3. Alberto Alesina & Yann Algan & Pierre Cahuc & Paola Giuliano, 2015. "Family Values And The Regulation Of Labor," Journal of the European Economic Association, European Economic Association, vol. 13(4), pages 599-630, August.
    4. Corrado Giulietti & Enrico Rettore & Sara Tonini, 2023. "The chips are down: the influence of family on children’s trust formation," Journal of Population Economics, Springer;European Society for Population Economics, vol. 36(1), pages 211-233, January.
    5. Cociuba, Simona E. & Ueberfeldt, Alexander, 2015. "Heterogeneity and long-run changes in aggregate hours and the labor wedge," Journal of Economic Dynamics and Control, Elsevier, vol. 52(C), pages 75-95.
    6. Benjamin Bridgman, 2016. "Engines of Leisure," BEA Working Papers 0137, Bureau of Economic Analysis.
    7. Fuchs-Schündeln, Nicola & Bick, Alexander & Lagakos, David, 2016. "How Do Average Hours Worked Vary with Development? Cross-Country Evidence and Implications," VfS Annual Conference 2016 (Augsburg): Demographic Change 145576, Verein für Socialpolitik / German Economic Association.
    8. Alonso-Ortiz, Jorge, 2014. "Social security and retirement across the OECD," Journal of Economic Dynamics and Control, Elsevier, vol. 47(C), pages 300-316.
    9. Alexander Bick & Nicola Fuchs-Schündeln & David Lagakos, 2018. "How Do Hours Worked Vary with Income? Cross-Country Evidence and Implications," American Economic Review, American Economic Association, vol. 108(1), pages 170-199, January.
    10. Della Lena, Sebastiano & Manzoni, Elena & Panebianco, Fabrizio, 2023. "On the transmission of guilt aversion and the evolution of trust," Games and Economic Behavior, Elsevier, vol. 142(C), pages 765-793.
    11. Üngör, Murat, 2014. "Some thought experiments on the changes in labor supply in Turkey," Economic Modelling, Elsevier, vol. 39(C), pages 265-272.
    12. Bertocchi, Graziella & Dimico, Arcangelo & Tedeschi, Gian Luca, 2022. "Strangers and Foreigners: Trust and Attitudes toward Citizenship," IZA Discussion Papers 15042, Institute of Labor Economics (IZA).
    13. Nicola Fuchs-Schündeln & Alexander Bick, 2014. "Taxation and Labor Supply of Married Women across Countries: A Macroeconomic Analysis," 2014 Meeting Papers 321, Society for Economic Dynamics.
    14. Duernecker, Georg & Herrendorf, Berthold, 2018. "On the allocation of time – A quantitative analysis of the roles of taxes and productivities," European Economic Review, Elsevier, vol. 102(C), pages 169-187.
    15. Kountouris, Yiannis & Remoundou, Kyriaki, 2013. "Is there a cultural component in tax morale? Evidence from immigrants in Europe," Journal of Economic Behavior & Organization, Elsevier, vol. 96(C), pages 104-119.
    16. Karaja, Elira & Rubin, Jared, 2022. "Θ The cultural transmission of trust norms: Evidence from a lab in the field on a natural experiment," Journal of Comparative Economics, Elsevier, vol. 50(1), pages 1-19.
    17. repec:spo:wpmain:info:hdl:2441/20g3idj0jd9iqosvjjdcbu44lu is not listed on IDEAS
    18. Zhang, Lini, 2018. "Credit crunches, individual heterogeneity and the labor wedge," Journal of Macroeconomics, Elsevier, vol. 56(C), pages 65-88.
    19. repec:hal:spmain:info:hdl:2441/20g3idj0jd9iqosvjjdcbu44lu is not listed on IDEAS
    20. Hansen, G.D. & Ohanian, L.E., 2016. "Neoclassical Models in Macroeconomics," Handbook of Macroeconomics, in: J. B. Taylor & Harald Uhlig (ed.), Handbook of Macroeconomics, edition 1, volume 2, chapter 0, pages 2043-2130, Elsevier.
    21. Xu, Xu & Jin, Xin, 2018. "The autocratic roots of social distrust," Journal of Comparative Economics, Elsevier, vol. 46(1), pages 362-380.
    22. So Kubota, 2020. "Culture, Gender, and Structural Transformation: The Case of Turkey," Working Papers 1925, Waseda University, Faculty of Political Science and Economics.

    More about this item

    Keywords

    Labor supply; Economics of culture; Optimal taxation;
    All these keywords.

    JEL classification:

    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
    • Z10 - Other Special Topics - - Cultural Economics - - - General
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:labeco:v:72:y:2021:i:c:s0927537121000890. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/labeco .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.