How Do Hours Worked Vary with Income? Cross-Country Evidence and Implications
Alexander Bick, Nicola Fuchs-Schündeln, David Lagakos
American Economic Review · 2018 · Volume 108 · Issue 1
Abstract
This paper builds a new internationally comparable database of hours worked to measure how hours vary with income across and within countries. We document that average hours worked per adult are substantially higher in low-income countries than in high-income countries. The pattern of decreasing hours with aggregate income holds for both men and women, for adults of all ages and education levels, and along both the extensive and intensive margin. Within countries, hours worked per worker are also decreasing in the individual wage for most countries, though in the richest countries, hours worked are flat or increasing in the wage. One implication of our findings is that aggregate productivity and welfare differences across countries are larger than currently thought.
Keywords
Macroeconomics: Production, Employment, Unemployment, Wages, Intergenerational Income Distribution, Aggregate Human Capital, Aggregate Labor Productivity, Time Allocation and Labor Supply, Wage Level and Structure, Wage Differentials, Macroeconomic Analyses of Economic Development, Economic Development: Human Resources, Human Development, Income Distribution, Migration
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