Show simple item record

dc.contributor.authorSCHIFF, Maurice
dc.date.accessioned2015-02-19T13:00:53Z
dc.date.available2015-02-19T13:00:53Z
dc.date.issued2015
dc.identifier.issn1028-3625
dc.identifier.urihttps://hdl.handle.net/1814/34705
dc.description.abstractEuropeans work much less than Americans. Some studies claim this is due to high taxes in Europe, which would benefit by adopting US tax rates and work time; others find that taxes have little or no impact on work time. I examine the hypothesis that Americans would benefit by reducing work time to Europe’s level. Empirical and experimental studies show utility falls as other people’s income rises. Due to its historical experience, Europe is able to internalize this and other negative externalities by restricting work time – through minimum vacation time and maximum weekly work hours – while the US is not, resulting in a Prisoner’s Dilemma “overworking trap” equilibrium. A simple model and work time data are used to derive the US welfare gain from reducing work time to Europe’s level. Findings are: i) parameter values are consistent with experimental results on the relative impact of own and other people’s income; ii) the welfare gain’s present value is about 120 percent of annual welfare; and iii) even if Europe's policy reduces work time excessively, it does remain beneficial as long as the reduction is less than twice the optimal one.en
dc.format.mediumapplication/pdf
dc.language.isoenen
dc.relation.ispartofseriesEUI RSCASen
dc.relation.ispartofseries2015/02en
dc.relation.ispartofseriesGlobal Governance Programme-152en
dc.relation.ispartofseriesGlobal Economicsen
dc.rightsinfo:eu-repo/semantics/openAccessen
dc.subjectWorken
dc.subjectLeisureen
dc.subjectEuropeen
dc.subjectUSen
dc.subjectPrisoner's dilemmaen
dc.subjectJ22en
dc.subjectD70en
dc.subject.otherRegulation and economic policy
dc.titleHabit, prisoner’s dilemma and Americans' welfare cost of working much more than Europeansen
dc.typeWorking Paperen
eui.subscribe.skiptrue


Files associated with this item

Icon

This item appears in the following Collection(s)

Show simple item record