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Marriage stability, taxation and aggregate labor supply in the U.S. vs. Europe

Marriage stability, taxation and aggregate labor supply in the U.S. vs. Europe
Marriage stability, taxation and aggregate labor supply in the U.S. vs. Europe
Americans work more than Europeans. Using micro-data from the United States and 17 European countries, we document that women are typically the largest contributors to the cross-country differences in work hours. We also show that there is a negative relation between taxes and annual hours worked, driven by men, and a positive relation between divorce rates and annual hours worked, driven by women. In a calibrated life-cycle model with heterogeneous agents, marriage and divorce, we find that the divorce and tax mechanisms together can explain 45% of the variation in labor supply between the United States and the European countries.
0304-3932
1-20
Chakraborty, Indraneel
d531140b-c0da-4661-87fe-22726f028bfb
Holter, Hans
5414f609-f25b-4b5e-bc32-dd5716f0f29a
Stepanchuk, Serhiy
ab625a3a-3db4-411f-90a4-1a2d2f9a0b17
Chakraborty, Indraneel
d531140b-c0da-4661-87fe-22726f028bfb
Holter, Hans
5414f609-f25b-4b5e-bc32-dd5716f0f29a
Stepanchuk, Serhiy
ab625a3a-3db4-411f-90a4-1a2d2f9a0b17

Chakraborty, Indraneel, Holter, Hans and Stepanchuk, Serhiy (2015) Marriage stability, taxation and aggregate labor supply in the U.S. vs. Europe. Journal of Monetary Economics, 72, 1-20. (doi:10.1016/j.jmoneco.2015.01.001).

Record type: Article

Abstract

Americans work more than Europeans. Using micro-data from the United States and 17 European countries, we document that women are typically the largest contributors to the cross-country differences in work hours. We also show that there is a negative relation between taxes and annual hours worked, driven by men, and a positive relation between divorce rates and annual hours worked, driven by women. In a calibrated life-cycle model with heterogeneous agents, marriage and divorce, we find that the divorce and tax mechanisms together can explain 45% of the variation in labor supply between the United States and the European countries.

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MarriageStability_SSRN.pdf - Accepted Manuscript
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Accepted/In Press date: 7 January 2015
e-pub ahead of print date: 21 January 2015
Published date: May 2015
Organisations: Economics

Identifiers

Local EPrints ID: 402800
URI: https://eprints.soton.ac.uk/id/eprint/402800
ISSN: 0304-3932
PURE UUID: 560ebfd3-3b30-49c0-b309-3719af7674db

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Date deposited: 15 Nov 2016 15:20
Last modified: 19 Jul 2019 19:36

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Contributors

Author: Indraneel Chakraborty
Author: Hans Holter

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