Why do Europeans Work Less than Americans? Public Consumption and Welfare Benefits as a Cause of the North-Atlantic Divide

We propose an explanation of why Europeans choose to work fewer hours than Americans and also suffer higher rates of unemployment. Labor market regulations, unemployment benefits, and high levels of public consumption in many European countries reduce, ceteris paribus, the gains from being employed,...

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Bibliographic Details
Main Authors: Axel Hall, Gylfi Zoega
Format: Report
Language:unknown
Subjects:
North Atlantic
Online Access:https://www.cesifo.org/DocDL/cesifo1_wp5264.pdf
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spelling ftrepec:oai:RePEc:ces:ceswps:_5264 2024-04-14T08:15:40+00:00 Why do Europeans Work Less than Americans? Public Consumption and Welfare Benefits as a Cause of the North-Atlantic Divide Axel Hall Gylfi Zoega https://www.cesifo.org/DocDL/cesifo1_wp5264.pdf unknown https://www.cesifo.org/DocDL/cesifo1_wp5264.pdf preprint ftrepec 2024-03-19T10:34:11Z We propose an explanation of why Europeans choose to work fewer hours than Americans and also suffer higher rates of unemployment. Labor market regulations, unemployment benefits, and high levels of public consumption in many European countries reduce, ceteris paribus, the gains from being employed, which makes employed workers ask for higher wages relative to productivity. The higher wages make firms offer fewer vacancies, as well as raising the opportunity cost of working by enabling employed workers to enjoy time-consuming consumption activities. We find empirical support for our thesis. job search, unemployment, working hours Report North Atlantic RePEc (Research Papers in Economics)
institution Open Polar
collection RePEc (Research Papers in Economics)
op_collection_id ftrepec
language unknown
description We propose an explanation of why Europeans choose to work fewer hours than Americans and also suffer higher rates of unemployment. Labor market regulations, unemployment benefits, and high levels of public consumption in many European countries reduce, ceteris paribus, the gains from being employed, which makes employed workers ask for higher wages relative to productivity. The higher wages make firms offer fewer vacancies, as well as raising the opportunity cost of working by enabling employed workers to enjoy time-consuming consumption activities. We find empirical support for our thesis. job search, unemployment, working hours
format Report
author Axel Hall
Gylfi Zoega
spellingShingle Axel Hall
Gylfi Zoega
Why do Europeans Work Less than Americans? Public Consumption and Welfare Benefits as a Cause of the North-Atlantic Divide
author_facet Axel Hall
Gylfi Zoega
author_sort Axel Hall
title Why do Europeans Work Less than Americans? Public Consumption and Welfare Benefits as a Cause of the North-Atlantic Divide
title_short Why do Europeans Work Less than Americans? Public Consumption and Welfare Benefits as a Cause of the North-Atlantic Divide
title_full Why do Europeans Work Less than Americans? Public Consumption and Welfare Benefits as a Cause of the North-Atlantic Divide
title_fullStr Why do Europeans Work Less than Americans? Public Consumption and Welfare Benefits as a Cause of the North-Atlantic Divide
title_full_unstemmed Why do Europeans Work Less than Americans? Public Consumption and Welfare Benefits as a Cause of the North-Atlantic Divide
title_sort why do europeans work less than americans? public consumption and welfare benefits as a cause of the north-atlantic divide
url https://www.cesifo.org/DocDL/cesifo1_wp5264.pdf
genre North Atlantic
genre_facet North Atlantic
op_relation https://www.cesifo.org/DocDL/cesifo1_wp5264.pdf
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