Why Do Americans Work So Much More Than Europeans?

Americans now work 50 percent more than do the Germans, French, and Italians writes Edward C. Prescott Senior Monetary Adviser Research Department Federal Reserve Bank of Minneapolis. This was not the case in the early 1970s, when the Western Europeans worked more than Americans.

His article examines the role of taxes in ac-counting for the differences in labor supply across time and across countries; in particular, the effective marginal tax rate on labor income. The population of countries considered is the G-7 countries, which are major advanced industrial countries. The surprising finding is that this marginal tax rate accounts for the predominance of differences at points in time and the large change in relative labor supply over time.

http://www.minneapolisfed.org/research/qr/qr2811.pdf