Why do Europeans work so little?

Abstract

Market work per person is roughly 10% higher in the United States than in Sweden. However, if we include the work carried out in home production, the total amount of work only differs by 1%. I set up a model and show that differences in policy - mainly taxes - can account for the discrepancy in both labor supply and home production between Sweden and the United States. These results are independent of the elasticity of labor supply. © (2009) by the Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.