TY - JOUR
T1 - Marriage stability, taxation and aggregate labor supply in the U.S. vs. Europe
AU - Chakraborty, Indraneel
AU - Holter, Hans A.
AU - Stepanchuk, Serhiy
N1 - Funding Information:
We thank Ricardo Reis (the Editor), one Anonymous Referee, Sören Blomquist, Harold Cole, Nils Gottfries, Urban Jermann, Dirk Krueger, Per Krusell, Iourii Manovskii, and Petra Todd for helpful discussions and comments. We also thank seminar participants at the University of Pennsylvania, Uppsala University, the University of Oslo, the Federal Reserve Board, the Federal Reserve Bank of Philadelphia, the Federal Reserve Bank of Dallas, the Federal Reserve Bank of New York, Bank of Norway, Bank of Hungary, Southern Methodist University, New Economic School, Göthe University Frankfurt, the 2013 AEA Annual Meeting (San Diego) the 5th Nordic Summer Symposium in Macroeconomics (Smögen), the 1st Joint French Workshop in Macroeconomics (Paris), the 2012 RES Annual Conference (Cambridge), the 2012 EEA Annual Meeting (Malaga), the 2011 National Conference of Swedish Economists (Uppsala), and our discussants Tobias Laun and Matthew Lindquist. Hans A. Holter is grateful for financial support from Handelsbanken Research Foundations, Browaldhstipend, and the Research Council of Norway, grant number 191884/V10 and grant number 219616; the Oslo Fiscal Studies Program.
PY - 2015/5/1
Y1 - 2015/5/1
N2 - 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.
AB - 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.
KW - Aggregate labor supply
KW - Divorce
KW - Heterogeneous households
KW - Marriage
KW - Taxation
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U2 - 10.1016/j.jmoneco.2015.01.001
DO - 10.1016/j.jmoneco.2015.01.001
M3 - Article
AN - SCOPUS:84928771406
VL - 72
SP - 1
EP - 20
JO - Journal of Monetary Economics
JF - Journal of Monetary Economics
SN - 0304-3932
ER -