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

Indraneel Chakraborty, Hans A. Holter, Serhiy Stepanchuk

Research output: Contribution to journalArticle

6 Scopus citations

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.

Original languageEnglish (US)
Pages (from-to)1-20
Number of pages20
JournalJournal of Monetary Economics
Volume72
DOIs
StatePublished - May 1 2015

Keywords

  • Aggregate labor supply
  • Divorce
  • Heterogeneous households
  • Marriage
  • Taxation

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

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