Working Papers with supplemental materials
Hours worked in the OECD 1960-2003: Driving forces and propagation mechanisms
Abstract
Patterns in market hours worked vary dramatically across OECD countries. Some countries display very steep declines, for example, France and Germany. In contrast, hours in the United States and Australia remain relatively flat. The goal of this paper is to identify the quantitatively important forces that drive market hours and identify the mechanisms through which these forces are propagated. To achieve this goal, I construct a growth model with the following key features: home production, taxes, subsistence consumption, and productivity growth in both the home and market sectors. I calibrate the model and simulate for a set of 15 OECD countries over the period 1960-2003. I determine the most quantitatively important forces driving hours to be changes in effective labor tax rates and productivity growth in both the home and market sector. The mechanisms through which these forces are propagated are home production and subsistence consumption. I show that a model that fails to include these key forces or mechanisms fails to generate the complete trends in hours observed in the data.
A cross country study of trends in time use
Extremely preliminary -- please do not cite without permissionAbstract
It has become widely recognized that trends in market hours worked vary across countries. Much work has been done trying to understand that forces that influence market hours. More traditional models, like the one used by Prescott (2004) focus on forces than influence the trade-off between market work and leisure. Other models, like Rogerson (2007), Ragan (2005) and, McDaniel (2009) include home production. Each find that home production is a key channel influencing the forces that shape market hours. Aguiar and Hurst (2006) Ramey and Francis (2006) have documented trends in market hours, home production and leisure in the United States. In this paper, I make use of data available from the Multi-National Time Use Study to document time allocation trends of a large set of developed countries. I also look deeper and report how time allocation between market home, home production and leisure varies among demographic groups across countries and time. I find significant, country independent, trends in time allocation by men and women that are not observable in the aggregate.
Tax data series updated 10/18/2009
Average tax rates on consumption, investment, labor and capital in the OECD 1950-2003
Abstract
This paper develops a method for calculating average tax rates on consumption and investment expenditures and labor and capital income. Tax rates are constructed for 15 OECD countries over the period 1950-2003. Total tax revenue is divided into revenue generated from four different sources: consumption expenditures, investment expenditures, labor income and capital income. To find the average tax rate, tax revenue from each source is then divided by the appropriate income or expenditure base. Other researchers have used a similar methodology previously e.g., Mendoza, Razin and Tesar (1994) and Carey and Rabesona (2002). However this series covers more countries for a longer time period. Mendoza et al. and Carey and Rabesona use OECD Revenue Statistics available in 1965. For this paper, national account publications from the OECD are used, which are available from 1950 onward. This allows for the calculation of a long time series for a broad set of countries.
These tax rates have been used by Ohanian, Raffo and Rogerson (2006) and Hendricks, McDaniel and Ohanian (2007).