Content area
Full text
Received: December, 2016
1st Revision: March, 2017
Accepted: June, 2017
DOI: 10.14254/2071789X.2017/10-3/19
JEL Classification: H20, J01, J29
ABSTRACT. Using country-level data from 2000-2013, we test the relationship between life satisfaction (measured as how people evaluate their life as a whole rather than their current feelings) and the motivation to work (measured as aggregate hours of work). Our hypothesis is that even after controlling for average labor income tax rates in countries with high and low average hours worked, there is a significant negative association between the motivation to work and life satisfaction. The main findings of this paper are that the increase in the motivation to work per employee comes at the expense of life satisfaction, and differences in average tax rates on labor income cannot account for differences in time allocation. Once life satisfaction is included, the hypotheses of previous neoclassical economic studies are almost irrelevant in determining the response of market hours to higher average tax rates on labor income. In line with our assumption, we find a negative relationship between life satisfaction and the motivation to work in the cross-country examinations. In countries with the highest hours worked (Hungary, Estonia), wealth is generally preferred to leisure and in countries with the lowest hours worked (France, Germany), leisure is preferred to wealth.
Keywords, motivation to work, labor supply, labor taxes, life satisfaction.
(ProQuest: ... denotes formulae omitted.)
Introduction
Nowadays, there are huge differences between Americans and Europeans in how the motivation to work changes in the labor market. In the 1990s, the average weekly working hours started to fall in Europe, whereas Americans started to work more. Using the average number of weekly hours of work data from the European Statistics database (Eurostat, 2017) and the Organisation for Economic Co-operation and Development (OECD, 2017a), we found that, in 2014, Americans worked 38.6 hours per week in market work (defined as paid time). For example, in the same year, the average number of weekly hours of market work by French workers was 34.4. The comparison between Germany and the United States is similar. However, the average weekly working hours were not the same in the early 1970s. Decomposing the weekly hours worked per worker into the weekly hours worked per person, we can...