Forces Shaping Hours Worked in the OECD, 1960-2004
- (pp. 27-52)
Abstract
The goal of this paper is to examine the role of taxes and productivity growth as forces influencing market hours. To achieve this goal, the paper considers a calibrated growth model extended to include home production and subsistence consumption, both of which are found to be key features influencing market hours. The model is simulated for 15 OECD countries. The primary force driving changes in market hours is found to be changing labor income tax rates. Productivity catch-up relative to the United States is found to be an important secondary force. (JEL E24, H24, H31, J22, J24)Citation
McDaniel, Cara. 2011. "Forces Shaping Hours Worked in the OECD, 1960-2004." American Economic Journal: Macroeconomics, 3 (4): 27-52. DOI: 10.1257/mac.3.4.27Additional Materials
JEL Classification
- E24 Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital
- H24 Personal Income and Other Nonbusiness Taxes and Subsidies; includes inheritance and gift taxes
- H31 Fiscal Policies and Behavior of Economic Agents: Household
- J22 Time Allocation and Labor Supply
- J24 Human Capital; Skills; Occupational Choice; Labor Productivity
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