DP11092 How Do Hours Worked Vary with Income? Cross-Country Evidence and Implications

Author(s): Alexander Bick, Nicola Fuchs-Sch√ľndeln, David Lagakos
Publication Date: February 2016
Date Revised: March 2017
Keyword(s): hours worked, labor supply
JEL(s): E01, E24, J21, J22
Programme Areas: Macroeconomics and Growth
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=11092

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 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 employed are also decreasing in the individual wage for most countries, though in the richest countries, hours worked are flat or increasing in the wage. Our findings imply that aggregate productivity and welfare differences across countries are larger than currently thought.