Democracy and the Supply of Labor

Abstract

The average number of hours we spend at work varies dramatically by country. Previous research focuses on tax policy, social security, and labor market regulation to explain the differences. This paper builds on previous work by focusing on politics. Specifically, it examines the relationship between democracy and the average number of hours worked per person employed. Using data on the supply of labor from the Penn World Tables 9.1, I find there is an important difference between democracies and dictatorships: as GDP/capita increases, individuals in democracies spend fewer hours at work than their counterparts in dictatorships. The results are robust to various specifications of the model that account for selection bias and data that are missing not at random (MNAR). These findings imply that the elections, civil rights, and the political liberties associated with democracy influence the amount of time people spend at work.